Short-term loans can save interest and be debt-free as soon as possible, but short-term loans have to bear a lot of payments every month, which is only suitable for lenders with strong repayment ability. If the repayment ability is slightly weak, it is best to choose long-term repayment so as not to affect the quality of life of family members.
Long-term loans also have the advantages of long-term loans: 1, which can make buyers gain greater purchasing power; 2. If the economic income changes during the repayment process, it can also be handled rationally; 3. In the process of repayment, if the borrower's income improves and he has repayment ability, he can apply for prepayment, thus saving mortgage interest.
First of all, there is no mortgage loan plan suitable for everyone, because the loan period varies from person to person.
If the family income is relatively high, and the monthly repayment does not affect the life at all, then it is more cost-effective to choose a short loan time, and you can pay a lot less interest. However, if your income is relatively average, or the cost of starting a new family is high, if the loan term is short, the monthly repayment pressure will be too great. In this case, long-term borrowing will be better, although it will pay more interest.
At present, there are two repayment methods of personal mortgage: equal principal and interest method and average capital method, which are quite different. Among them, the equal principal and interest method is characterized by the same repayment amount every month. In the "principal and interest" distribution ratio of monthly payment, the interest ratio paid in the first half of the year is large, and the principal ratio is small, and it gradually turns into a small principal and interest ratio after half of the repayment period. The total interest paid is more than the interest paid by the average capital method. The longer the loan term, the greater the interest difference. However, because the repayment amount of this method is the same every month, it is suitable for families with relatively fixed income, especially young families, because their income will increase with age or promotion, so the principal and interest method can be used.
The average capital method is characterized by different monthly repayment amounts. It divides the loan principal evenly according to the total repayment months (average capital), and adds up the monthly interest of the remaining principal in the previous period to form the monthly repayment amount, so the repayment amount in the first month is the largest, and then decreases month by month. The total interest paid is less than the equal principal and interest method. However, this repayment method has a higher repayment amount in the early stage of the loan period, which is suitable for lenders with strong repayment ability in the early stage, such as middle-aged families, because their income may decrease with their age or retirement, so the principal method can be adopted.
Generally speaking, to choose the repayment method that suits you, we should first consider whether the pressure is appropriate, and then consider the possibility of early repayment in the future. If you plan to repay the loan in advance, it is recommended to choose the latter, that is, average capital, so that you can pay less interest and be more cost-effective.