Loan interest rate
The loan interest rate refers to the ratio of interest amount to principal amount during the loan period. The interest rate of loan contracts with banks and other financial institutions as lenders can only be determined through consultation within the upper and lower limits of interest rates stipulated by the Bank of China. So how to repay the bank loan is the most cost-effective? Here I would like to introduce some knowledge about loans to you.
1, equal repayment of principal and interest: this is the mainstream repayment method at present. In this way, the same amount will be paid every month, and the principal and interest amount will be different. The previous principal amount is greater than the interest amount; The amount of interest paid later is greater than this amount. This repayment method is suitable for loan applicants with stable income, and it is more convenient to arrange income and expenditure; Its disadvantage is that the amount of interest paid is relatively large, the interest will not decrease with the decrease of principal, and the total interest on repayment is high.
2. Matching principal repayment: In this way, the loan applicant repays the same principal every month, and the monthly interest will decrease with the decrease of this amount. There are more principal and interest paid in the early stage, but the total amount of interest to be paid is relatively small, and the repayment burden decreases month by month. This repayment method is suitable for loan applicants who have sufficient funds at hand after the loan and have high repayment ability in the early stage.
3. One-time repayment of principal and interest: If the loan term is within one year (including one year), the principal and interest will be repaid at maturity, and the interest will be paid off together with the principal. This repayment method is generally only open to small short-term loans. The applicability is not strong.
4. Pay interest and repay the principal on schedule: In this way, the loan applicant decides to repay the loan every month, quarter or year. To put it simply, the loan applicant integrates the money to be repaid every month for several months according to different financial conditions. This repayment method is suitable for people with unstable income.
Banks should pay attention to the way of handling loans and choose the repayment method that suits them. Different repayment methods have different repayment funds every month, so you can choose according to your actual situation. The above is an introduction about the interest rate of bank loans and how to repay them cost-effectively Let's learn more about repaying loans.