The current repayment methods are generally average capital and equal principal and interest. As for which is good, it depends on the individual situation:

1. Equal principal repayment: This repayment method has great pressure in the early stage, but the interest is less than the equal principal and interest. If the funds are sufficient, it is best to choose this repayment method.

2. Matching principal and interest repayment: This repayment method has the same monthly repayment amount and is suitable for people with insufficient funds but stable income.

Loan refers to a form of credit activity in which banks or other financial institutions lend monetary funds at a certain interest rate and must return them. The simple and popular understanding is to borrow money with interest.

Banks put concentrated money and monetary funds out through loans, which can meet the needs of social expansion and reproduction and promote economic development; At the same time, banks can also obtain loan interest income and increase their own accumulation.

loan rate

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(1) interest rate

The proportion of interest in the total loan funds within a certain period is the manifestation of the loan price. Namely: interest rate = interest amount/loan principal.

Interest rates are divided into daily interest rates, monthly interest rates and annual interest rates.

The lender determines the loan interest rate with the lending bank according to the benchmark interest rate and interest rate floating space announced by relevant laws and regulations of various countries.

(2) benchmark interest rate

The benchmark interest rate is a universal reference interest rate in the financial market, and other interest rate levels or financial asset prices can benefit from this benchmark.

The level to be determined. Benchmark interest rate is one of the important prerequisites for interest rate marketization. Under the condition of interest rate marketization, financiers measure financing costs.

Investors calculate investment income and management's macroeconomic regulation and control. Objectively, it is required to have a recognized benchmark interest rate.

For reference. Therefore, in a sense, the benchmark interest rate is the core of the formation of interest rate marketization mechanism. Simply put, you usually

Deposit the money in the bank and he will give you interest. The greater the benchmark interest rate, the more interest; The smaller the benchmark interest rate, the smaller the interest.

How to get the lowest bank loan interest rate

First, choose the bank with the lowest interest rate to apply for a loan.

Although the central bank has introduced the benchmark interest rate, the interest rates of all banks will rise above the benchmark interest rate, and the specific floating situation is different from bank to bank. Therefore, in order to get the lowest bank loan interest rate, we must "shop around" and then choose the bank with the lowest interest rate.

Second, pay attention to personal credit reporting and maintain good credit reporting.

Bank loan interest rates are all calculated by computers based on personal credit information, income, work and other information. In other cases, you can only keep your credit information and try to repay your credit card on time to avoid overdue.

Which is the best way to repay the mortgage?

There are two repayment methods of bank mortgage: equal principal and interest repayment and equal principal repayment.

Matching principal and interest repayment is a popular repayment method at present, and it is also recommended by banks.

This is a repayment method with a fixed amount of expenditure. That is, the borrower repays the loan principal and interest with the same amount in each installment, and the repayment amount in each installment includes the principal to be repaid in the current period and the interest to be borne. During the whole repayment period, the monthly repayment amount is fixed.

Matching principal repayment means that the borrower distributes the loan amount evenly throughout the repayment period and repays it monthly, and at the same time pays off the interest generated by the loan balance from the previous repayment date to the current repayment period.

The loan principal is divided equally throughout the repayment period, and the interest is calculated daily according to the loan principal balance. The monthly repayment amount is gradually decreasing, but the rate of repayment of principal remains unchanged.

1, equal principal and interest repayment method, that is, the borrower repays the loan principal and interest in equal amount every month, in which the monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled every month.

Because the monthly repayment amount is equal, in the initial monthly repayment of the loan, after excluding the monthly settlement interest, the loan principal is less; In the later stage of the loan, due to the continuous reduction of the loan principal, the loan interest is continuously reduced in the monthly repayment amount, and the monthly repayment of the loan principal is more.

2. Average capital repayment method

Because the monthly repayment of the principal is fixed, the monthly loan interest decreases month by month with the decrease of the principal balance, so the average capital repayment method has a large monthly repayment amount at the initial stage of the loan, and then decreases month by month (monthly repayment amount = monthly repayment of the principal × monthly interest rate).

3, the difference:

① The total amount of interest is different: in the same period, the interest of equal principal and interest is much higher than the interest of average capital;

② Different repayment pressures: On average, there is a large amount of money to be repaid every month in the early stage of capital, but the amount to be repaid in the later stage is less and less, so the repayment pressure in the early stage is high and the repayment pressure in the later stage is low. Equal principal and interest every month, moderate pressure;

③ The cost of prepayment is different: the average capital pays more principal in the early stage, and the equal principal and interest pays more interest in the early stage. Therefore, if prepayment is considered, the shorter the loan time, the more cost-effective the average capital will be than the equal principal and interest.

There is no fixed standard as to which repayment method is more cost-effective: average capital or equal principal and interest. Although the interest rate in average capital is much lower than the equal principal and interest, it is not necessarily suitable for everyone, so when applying for a mortgage, you should choose average capital or equal principal and interest, depending on your actual situation.

What are the repayment methods of loans and which one is more cost-effective?

Generally speaking, loan repayment can be divided into: equal principal and interest repayment method, average capital repayment method and monthly interest repayment method, which are the three most common repayment methods in loans. But which repayment method is better? Below, let's analyze the advantages and disadvantages of these three repayment methods.

I. Repayment of equal principal and interest

The advantage of matching principal and interest repayment is that the monthly repayment amount is the same, which is easy to remember, with less monthly repayment in the early stage and less repayment pressure.

This repayment method can generally apply for a longer loan term, mostly 10 years or even longer, so the repayment pressure is reduced, which is suitable for customers with longer project cycle and slower repayment.

However, compared with the repayment method in average capital, the repayment of principal per period is less and the total interest is higher. Compared with paying interest on a monthly basis and repaying the principal when it is due, the capital utilization rate is low.

Two. Average capital repays.

The advantages of equal principal repayment are: more monthly repayment in the early stage and less total interest payment. Using the repayment method of equal principal and interest, you can generally apply for a longer loan period.

However, there are many monthly payments in the early stage of equal principal repayment, and the repayment pressure is great; If it can't be returned on time, it will cause loans overdue to affect the credit investigation. The monthly repayment figures are different, so it's hard to remember.

Three. Pay interest on a monthly basis and repay the principal when due.

Advantages: You only need to pay interest every month, and you don't need to repay the principal, so the repayment pressure is small and the capital utilization rate is high. This method is more suitable for customers with fast capital circulation and short payment cycle.

Generally speaking, this repayment method is a three-year credit, which is transferred once a year. If the funds are sufficient in the second year and the loan is no longer needed, there is no need to go to the bank to renew the loan and there is no penalty.

This method also has disadvantages, such as the pressure of repayment after one year, and the principal must be returned after one year. If the fund arrangement is not in place, it may be overdue and affect the credit investigation. Borrowing money from the private sector is costly and risky.

What is the best way to repay the bank loan?

Choosing equal principal and interest repayment or equal principal repayment depends on your own economic conditions.

If the repayment is about 5 years in advance, it is best to choose the repayment method in average capital.

For example, Mr. Xu chose a loan with a maximum term of 30 years and a total amount of 680,000. The monthly repayment amount in the first year is 3906.62 yuan, of which 3 160.99 yuan is interest and 745.63 yuan is principal. This customer * * * repaid the principal of 745.63× 65,438 yuan+February = 8,947.56 yuan and the interest of 365,438 yuan +060.99 yuan in the past year. It can be seen that under the method of matching principal and interest, most funds only pay principal and interest, and the principal only accounts for 19. 1%. At this time, if you choose to repay the loan in advance, the interest loss will be great. If you expect to repay the loan in advance, it is best to choose the average capital repayment method, and the loan period should not be too long.

Matching principal and interest repayment method is to add up the total principal and interest of mortgage loans and then distribute them evenly to each month of repayment period. The monthly repayment amount is fixed, but the proportion of principal in the monthly repayment amount increases month by month, and the proportion of interest decreases month by month.

Average capital refers to a repayment method of loans. During the repayment period, the total amount of loans is divided into equal parts, and the same amount of principal and interest generated by the remaining loans of the month are repaid every month. In this way, because the monthly repayment amount is fixed and the interest is less and less, the borrower is under great pressure to repay at first, but as time goes on, the monthly repayment amount is less and less.

Extended data:

Prepaid procedure

1. Repayment in full in advance: after the loan bank verifies that the relevant materials are correct, it will go through the formalities of prepayment in full.

2. Early repayment with the same loan term: the loan bank instructs the borrower to fill in the relevant agreement. If the original loan guarantee method is mortgage insurance and mortgage registration has not been done, you need to go to the insurance company designated by the city center to go through the formalities of reducing the insured amount with the original policy, your ID card and relevant agreements, and the final agreement should be sent to the corresponding sub-center by the loan bank in time.

3. If the original loan guarantee method is mortgage insurance and mortgage registration has been completed, and the borrower who chooses non-mortgage insurance applies for partial repayment in advance and shortens the loan term: the loan bank instructs the borrower to fill in the relevant agreement, and the signed agreement is sent to the corresponding sub-center by the loan bank in time.

4. The mortgage insurance chosen as the original loan guarantee method is still within the insurance period, and the mortgage registration has not yet been handled: the borrower can apply for partial repayment in advance and shorten the loan period, which can be handled directly at the guarantee center.

Repayment procedure

According to the regulations of the bank, customers need to submit a written application one week to one month in advance to agree on the repayment date. Then, according to the agreed date, bring your ID card and the loan contract signed with the bank to the bank to fill in the loan repayment application form and prepayment agreement, and deposit the money to be repaid into your account for withholding the loan principal and interest according to the requirements of the bank, and the bank will automatically deduct the money.

There is no limit to the number of times a bank repays the loan in advance, and it can pay off the loan in whole or in part. It's just that the starting amount of each loan repayment is different from bank to bank. Some regulations are 65,438+0,000 yuan or multiples of 65,438+0,000 yuan, and some banks stipulate that the loan can be repaid in advance if it is more than 1000 yuan.

Some borrowers who repay loans in advance can choose two ways: one is to reduce the monthly repayment amount and keep the repayment period unchanged; The other is to shorten the repayment period and keep the monthly repayment amount unchanged. If the income of the lender keeps increasing, you can choose the repayment method of shortening the loan term and realize the desire of being debt-free as soon as possible. If the income does not increase too much, you can reduce the repayment amount and keep the repayment period unchanged, which will reduce the repayment pressure.

It is worth mentioning that the prepayment application form is irrevocable once confirmed by the borrower's bank. As a supplementary clause of the loan contract, it has the same legal effect as the loan contract. If the loan purchaser fails to repay the loan in advance according to the date and amount specified in the application for prepayment sent to the borrower's bank for any reason, it will be regarded as overdue repayment, and the loan purchaser will bear corresponding liabilities for breach of contract according to the loan contract.

Reference link: Advance payment-Baidu Encyclopedia

Which repayment method is better? Repayment is more cost-effective.

Now there are all kinds of loan products, and more and more people are willing to choose loans to solve their financial difficulties. However, many people are in trouble when applying for loans. What is the best way to repay the loan? The following is an analysis, hoping to help everyone.

Loan repayment method

There are two main repayment methods, namely equal principal and interest repayment and equal principal repayment. Matching principal and interest repayment means that the borrower repays the same amount of loans (including principal and interest) every month during the repayment period. Matching principal repayment means that during the repayment period, the borrower repays the principal on average every month, and then calculates the interest according to the remaining principal.

Characteristics of two repayment methods

To find out which loan repayment method is good, we must first know what are the characteristics of the two repayment methods.

1, equal repayment of principal and interest

With the increase of the number of repayment periods, the principal part of each repayment period increases, and the amount of increase in the principal part of each repayment period is exactly the same as the amount of decrease in the interest part. In other words, this method mainly pays interest in the early stage and principal in the later stage. From the perspective of interest expenditure, it is not appropriate to repay in advance. In this way, because the monthly repayment amount is fixed, the expenditure of family income can be controlled in a planned way, and it is also convenient for each family to determine the repayment ability according to their own income.

2. Repayment by average capital

If you choose the average capital as the repayment method, you will pay more interest at the beginning because of more principal, so the initial repayment amount will be more and will decrease every month in the future. The advantage of this method is that the initial repayment amount is large and the interest expense will be reduced, which is more suitable for families with strong repayment ability. In other words, the average capital takes precedence over your loan principal. The more principal you pay in advance, the less interest you bear later. If you plan to repay the loan in advance, it is much more cost-effective to choose average capital than equal principal and interest.

Comments: Equal principal and interest and average capital, which of these two repayment methods is better depends on whether you decide to repay in advance. If you choose to repay in advance, it is more cost-effective to choose average capital. If you don't plan to repay in advance, you'd better choose the repayment method of equal principal and interest with a fixed monthly repayment amount. Come if you know which way to repay the loan is good.

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What are the repayment methods of credit loans? Which repayment method is good?

What are the repayment methods of credit loans? Which repayment method is good? As we all know, there are credit loans, mortgage loans and so on. After careful consideration, we all chose the appropriate loan method before the loan, but in the end we ignored the repayment method and rashly chose one, which eventually led us to pay a lot of interest. Then, what are the repayment methods of credit loans? Which repayment method is good? Let's get to know each other.

What are the repayment methods of credit loans? Which repayment method is good? At present, banks generally provide the following methods:

The first type: equal repayment of principal and interest. Using this repayment method, the same amount is paid every month, which is convenient to operate, and it is also convenient to arrange income and expenditure by bearing the same amount every month. This repayment method is suitable for borrowers with stable income. Its disadvantages are that the interest will not decrease with the repayment of the principal amount, the bank funds take up a long time, and the total repayment interest is relatively high.

The second type: equal principal repayment. This is also the repayment method commonly used by banks at present. The borrower will allocate the principal to each month and pay off the interest from the previous trading day to the repayment date. The total interest cost of this repayment method is low, but the principal and interest paid in the early stage are more, and the repayment burden decreases month by month. This repayment method is suitable for people with higher income at present, but it is predicted that their income will decrease in the future.

The third type: one-time repayment of principal and interest. The bank's stipulation for this repayment method is that if the loan term is within one year (including one year), the principal and interest will be repaid at the maturity, and the interest will be paid off together with the principal. However, when banks choose this repayment method, the approval will be stricter, and they are generally only open to small short-term loans. This repayment method is simple to operate, but its applicability is not strong.

Fourth: repay the principal and interest on schedule. After consultation with the bank, the borrower sets different repayment time units for the repayment of loan principal and interest. That is, decide to repay once a month, quarterly or annually. In fact, according to different financial conditions, the borrower collects the money to be repaid every month and pays it back together for several months. Not all banks have this repayment method, which is suitable for people with unstable income.

What are the repayment methods of credit loans? Which repayment method is good? The above are the explanations of several common repayment methods at present. Do you understand them? Each repayment method has its own advantages and disadvantages. After reading the above repayment methods, you can choose the one that suits you best and has the highest cost performance.