In the past, Dr. Kang always thought that early repayment meant strong repayment ability.
There is actually another explanation-breach of contract.
Then, if you have money, do you want to repay the loan in advance? What is the impact of prepayment?
1, prepayment by credit card
Paying back the credit card arrears in advance helps you maintain a good repayment habit, and the credit report shows that your personal credit is good. Generally speaking, because you actively repay the loan and leave a good impression on the bank, when you apply for a new credit card, the approval will be faster and it will be easier to raise the limit.
2. Early repayment of online loans
Some small loan products can be borrowed and returned. Early repayment is not a breach of contract, so there is no liquidated damages, which naturally will not affect personal credit. However, for some large-scale online loan products, repaying the loan in advance is a breach of contract and needs to bear the corresponding liability for breach of contract. Whether to pay liquidated damages or not, and the amount of liquidated damages depends on the specific tips and requirements of the loan application page or the IOU agreement.
Therefore, everyone must know clearly in advance when applying for online loans, so as not to be fined for breach of contract or even affect credit information.
3. Repay the mortgage loan in advance
Judging from the loan contract, early repayment is a breach of contract, and the borrower should bear the corresponding liability for breach of contract and pay a certain amount of liquidated damages as agreed in the contract. Therefore, it may have a negative impact on personal credit reporting and re-applying for loans.
It is understood that when lending institutions submit the information of users' "prepayment" to the credit information system of the People's Bank of China, they will show that they are in a "special transaction" and will not cause bad records in personal credit reports. However, some lending institutions will regard "prepayment" as negative information, which will affect the re-application for loans.
To put it bluntly, prepayment is generally to save interest, but sometimes prepayment is not cost-effective. If you are in the following situations, it is not recommended that you repay in advance:
1. Repay with the emergency fund
For lenders, raising interest rates and raising interest rates are nightmares, so they always want to pay back the money they owe to the bank when their financial ability is suitable. But for consumers who are short of funds and have limited economic ability, mortgage is almost a half-life savings. Once a large sum of money is paid in advance out of panic, the original life plan will be disrupted. Once there is any emergency, it can't cope with the economic pressure, and it is possible to "lose big because of small".
Two: the repayment period of equal principal and interest is over half.
According to the repayment calculation method of equal principal and interest, if the loan term exceeds half, it means that 50%-80% of all loans and interest have been repaid, and the monthly remaining principal accounts for a large proportion, with little interest. At this point, most of the money and most of the pressure have passed, and the significance of early repayment is not great. If the money is not enough, there is no need to rush to repay in advance.
Especially in the later period of repayment, there is no need to use centralized funds to repay. This not only disrupts financial planning, but also is not conducive to the effective use of funds.
Three. Average capital's repayment period has reached 1/3.
The repayment method of Average capital is to repay the principal equally every month, with decreasing interest, and it is easier to repay later. When you pay back to one-third of the fixed number of years, your mortgage interest will soon be paid off, and the remaining principal will begin to exceed the interest. If you repay in advance at this time, the repayment part is actually more of the principal, which is not conducive to effective interest savings.
Fourth, there are better investment and financial management channels.
If your funds have better investment and wealth management channels, such as investment funds, foreign exchange and other financial products, you can get a higher rate of return, and the income generated is higher than the interest saved by early repayment, then in this case, it is a good way to choose Qian Shengqian's method for mortgage repayment.
Five: enjoy preferential interest rates or discounts on loans.
If property buyers enjoy the discount interest rate, once they choose to repay the loan in advance, they will no longer be able to enjoy the discount interest rate, which is not worth the candle.
Six: provident fund loans to buy a house
If the property buyers choose the provident fund portfolio loan, after repaying the loan in advance, the provident fund will cease to be used, and will be kept at the current interest rate, and can only be withdrawn when they retire. This fund will bring too little income in the next few years.
Of course, the provident fund policy will vary from region to region. In some areas, it is allowed to withdraw provident fund to repay housing loans within one year. At this time, you can also consider using the provident fund flexibly.
In addition, mortgage is the most stable asset among all assets, and maintaining a partial loan relationship with banks is also good for credit.
For example, in many banks now, if you have a mortgage and pay it back normally for one or two years in a row, you can borrow hundreds of thousands of credit loans. Although the amount varies from bank to bank, it is generally in the range of 100 thousand to 1 million. If you want to buy a second house now, you are not eligible for a house purchase loan, but you can get a credit loan product from the bank, and the interest rate is not high, which is much better than borrowing from other channels.
But if you are in the following situations, Dr. Kang suggests that you should repay the loan in advance:
In the first case, the house is for sale.
First of all, if you want to sell a house, you need to pay off the loan first, otherwise the house will not pass the customs. Some people may want to use the buyer's down payment to pay off the mortgage and then transfer the ownership, but this will obviously increase the risk of the buyer, and it is difficult for the buyer to agree, so it is not easy to find such a buyer. If you have money, you might as well pay off the mortgage first, saving time and effort.
In the second case, the mortgage interest rate has risen sharply.
There are two kinds of mortgage interest rates: fixed interest rate and floating interest rate. If it is a floating interest rate, the loan interest rate is not static. If commercial banks raise the mortgage interest rate on their own, it will not affect the previous loans, but if the central bank raises the benchmark interest rate, even the previous loans, the loan interest rate will increase accordingly. If the loan interest rate rises sharply, it will greatly increase the loan interest. If you have money at this time, it may be more cost-effective to repay the loan in advance.
In the third case, use the house as a financing tool.
Some people buy houses as financing tools, hoping to get more loans from banks. However, due to the continuous rise of housing prices in recent years, the evaluation value of most houses has increased a lot compared with the initial purchase. If you pay off the mortgage loan in advance and get the mortgage loan from the bank, you can often get a larger loan amount in this way.
In the fourth case, I want to buy a second suite.
At present, many cities are restricting purchases. If there is a need to buy a second suite, you also need to repay the loan in advance to qualify for buying a house.
Finally, I want to tell you that whether to repay the loan in advance should be rationally chosen according to your own situation. Don't listen to the wind and rain, do more homework, understand the mortgage policy, and choose the way to maximize benefits.