The fixed interest rate standard varies from bank to bank. Its advantages are low interest rate risk, stable income and no adjustment with price or other factors. The disadvantage is that no matter how the bank interest rate changes, increases or decreases, the borrower pays interest at a fixed rate, which will not change with the market, so it is often higher than the benchmark interest rate by a certain percentage point. The fixed interest rate repayment method is suitable for people with fixed income, as well as professional investors or businessmen.

2. Repayment by average capital

Its advantage is that the overall interest expense is low, and the monthly repayment amount will be reduced in the following time. The disadvantage is that the burden of early repayment is heavy, especially the first repayment. Equal principal repayment is suitable for people with higher income, such as executives, gold collars and returnees.

3. Equal repayment of principal and interest

Matching principal and interest repayment means that the proportion of principal in the borrower's monthly repayment increases month by month and the proportion of interest decreases month by month. If the mortgage is repaid with equal principal and interest, the borrower's monthly payment will remain unchanged, which is convenient for the borrower to arrange income and expenditure, but its overall interest expenditure is more. This method is suitable for people with stable working income, such as employees of state-owned enterprises and institutions.

4. Free repayment of provident fund

Free repayment of provident fund refers to setting the minimum monthly repayment amount. As long as the monthly repayment amount is not lower than the set minimum repayment amount, some systems that pay more each month will automatically be classified as early repayment, which is a unique repayment method of provident fund loans. Compared with the traditional repayment of equal principal and interest or equal principal, it has the advantages of freedom, flexibility and convenience, but the disadvantage is that the minimum repayment amount is usually lower than the normal monthly repayment amount, so the pressure of final principal payment is greater. This method is suitable for employees who meet the loan conditions.

Tips: The above information is for reference only, and the repayment agreed in the loan contract shall prevail.

Reply time: 2021-11-26. Please refer to the latest business changes announced by Ping An Bank in official website.