Average capital refers to dividing the total loan into equal parts during the repayment period, repaying the same amount of principal and the interest generated by the remaining loans in the current month every month.
Advantages: Under the same conditions, the total interest repaid by this repayment method is less than the equal principal and interest, and the repayment burden will be gradually reduced as time goes by.
Disadvantages: in previous years, the monthly payment was higher than the matching principal and interest, and the pressure would be great.
2. Equal repayment of principal and interest
Matching principal and interest repayment method, also known as regular interest payment method, means that the borrower repays the loan principal and interest in equal amount every month, calculates the monthly loan interest according to the remaining loan principal at the beginning of the month, and settles it every month.
Advantages: pay a fixed amount to the bank every month, and the monthly payment in previous years is obviously less than the average capital.
Disadvantages: A large part of the repayment in previous years was interest, and the total interest repaid under the same conditions was more than the average capital.
What do I need to prepare for prepayment?
1. Understand the prepayment conditions.
Some banks have years to repay loans in advance, most of which are 1 year. If the buyer's loan term is less than 1 year and wants to repay the loan in advance, it may need to pay a certain amount of liquidated damages as agreed in the contract. Therefore, people who repay loans in advance need to know from their own banks whether they will default because of repaying loans in advance.
2. Make an appointment with the loan bank
Banks generally require lenders to submit written or telephone applications 15 working days in advance, and it usually takes about one month for banks to approve lenders' mortgage prepayment applications. Secondly, the borrower needs to bring his ID card and loan contract to the bank for approval, and the specific materials to be prepared need to be negotiated with the bank first.
3. Prepare materials.
If the borrower needs to repay the loan in advance, he should generally apply by phone or in writing and go through the examination and approval formalities at the bank with his ID card and loan contract. If it is a borrower who has settled all the balance, after the bank calculates the remaining loan amount, it is convenient for the borrower to save enough money to repay the loan in advance. If you are a customer or owner of the sub-mortgage business, you must find a professional guarantee institution to do entrusted notarization to avoid the risk that the customer will not buy it after the owner repays in advance or the owner will raise the price after the customer pays the final payment with the down payment.