For a loan with a term of 20 years and equal repayment of principal and interest, if it is to be repaid in advance, it is best to run before the seventh year.
Because according to the calculation method of equal principal and interest, although the monthly repayment amount remains unchanged throughout the repayment period, the proportion of principal and interest will change constantly. At the beginning of repayment, interest accounts for the proportion. As customers continue to repay, the proportion of interest decreases month by month, and the proportion of principal increases month by month. For a 20-year loan, generally from the sixth year, the principal ratio will gradually exceed the interest ratio.
Therefore, it is recommended to repay the loan in advance before the seventh year, which will reduce the interest more. If prepayment is not operated until the late repayment period, the interest will be basically paid off, and even if prepayment is made, there will not be too much interest reduction.
Of course, it should be noted that some banks may have certain requirements on the prepayment time of loans, and they need to repay in full and on time according to the agreed repayment plan, otherwise they will pay liquidated damages. In this regard, the customer had better wait for the specified time before operating (the specified time is mostly one year).
Which year is the most cost-effective to repay the principal and interest in 20 years?
1, it is more cost-effective to pay off the equal amount of principal and interest in the seventh year after 20 years, because the equal amount of principal and interest is calculated according to the way of decreasing interest, so the early repayment is mainly to pay interest, but after the peak, the subsequent interest needs to be paid back less, so paying off in advance can save low cost and is not cost-effective.
2. If the user wants to calculate the optimal period of early settlement, it can be estimated according to 1/3 of the loan application period. For example, if the loan is 30 years, it should be paid off within the first 10 year. At the same time, the cost of early settlement of liquidated damages needs to be included in the cost.
1. Equal principal and interest
1. Equal principal and interest repayment method, also known as regular interest payment method, refers to the borrower's equal repayment of loan principal and interest every month, in which the monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled monthly. Add up the total principal and interest of the mortgage loan and distribute it evenly to each month of the repayment period. As a repayment, he pays a fixed amount to the bank every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.
Second, the average capital
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.
Third, the difference between equal principal and interest and average capital.
1, the equal principal and interest repayment method and average capital repayment method, the total amount of interest paid is different.
Under the same loan amount, interest rate and term, the interest of "average capital repayment method" is less than that of "equal principal and interest repayment method". When the general capital loan method starts to repay, the monthly repayment amount will be higher than the amount of equal principal and interest, which is very stressful.
2. Matching principal and interest repayment method Although the repayment amount is large, the funds also have time value. Less repayment in the early stage can be used in other investment and wealth management places, and choosing the repayment method of equal principal and interest is helpful for borrowers to arrange their monthly income and expenditure reasonably.
3. The total repayment amount of average capital repayment method is less than the equal principal and interest. Because the average capital repayment method has a large repayment amount in the initial repayment, it shortens the utilization time of funds, so the interest is less.
Generally speaking, the two repayment methods of equal principal and interest and average capital have their own advantages and disadvantages. Which repayment method to choose depends on your own economic strength and economic situation at that time, and then choose the appropriate repayment method according to your actual situation.
The loan is 700,000 yuan, with equal principal and interest. In which year is it appropriate to pay off the 20-year mortgage?
In the first seven years.
For commercial loans, if the repayment method is equal principal and interest, it is reasonable for the bank staff to suggest paying off the loan within the first third of the total repayment time. Because of the repayment method of equal principal and interest, the monthly mortgage payment in previous years was almost always to pay interest, and the principal was very small. The sooner you pay back the money in advance, the more money you save, and you don't have to pay so much interest.
Matching principal and interest means that the borrower repays the loan principal and interest with the same amount every month. Because the monthly repayment amount is equal, in the early stage of the loan, the repayment interest is more and the loan principal is less, while in the later stage of the loan, the loan interest decreases and the loan principal is more. Therefore, it can be simply understood as the way to pay interest first and then repay the principal.
Extended data:
Precautions:
1. Handle the cancellation of house mortgage in time: house mortgage during the loan period. This house cannot be rented or resold. Therefore, after paying off the loan, you must go to the bank to handle the mortgage cancellation business in time, otherwise the mortgage record will still be filed in the real estate department, laying a hidden danger for the future.
2. Don't repay the provident fund first for partial loan repayment: If you choose a portfolio loan when handling the loan, it will involve the question of which part of the loan will be repaid first. I suggest you pay back the commercial loan first, because everyone knows that the interest of commercial loan is higher than that of provident fund loan. If that part of the commercial loan is paid off first, then for individuals and families, the monthly mortgage pressure will definitely be reduced and the interest will be saved.
3. Understand the bank's policy of repaying loans in advance: Be sure to understand the bank's policy in advance before repaying loans in advance. Not all banks have the same policies, and some even affect their credit records and even pay fines. Therefore, it is necessary to know clearly in advance, and it is recommended to be cautious when handling bank loans.
Which year is most suitable for 20 years of equal principal and interest?
Matching principal and interest means paying interest first, and then paying principal. The first half of the whole loan basically accounts for the largest proportion of interest, and the second half accounts for the largest proportion of principal.
Therefore, the borrower only needs to repay before 1/2, which can effectively reduce the interest; When the repayment period exceeds 1/2, it is not so cost-effective to choose early repayment.
Assuming that the borrower chooses a repayment period of 30 years, it is best to repay in advance in the 15 year. If you choose a repayment period of 20 years, it is best to choose early repayment in the first 10 year.
Matching principal and interest refers to a loan repayment method, that is, repaying the same amount of loans (including principal and interest) every month during the repayment period.
Equal principal and interest and average capital are not the same concept. Although the monthly repayment amount may be lower than that in average capital at the beginning, the interest paid in the end will be higher than that in average capital, which is also a method often used by banks.
Calculation method
Calculation formula of monthly repayment amount:
P: loan principal
R: monthly interest rate
N: number of repayment periods
Attachment: monthly interest rate = annual interest rate/12
The following example illustrates the equal principal and interest repayment method.
Suppose the borrower obtains a personal housing loan of 200,000 yuan from the bank, with a loan term of 20 years and an annual interest rate of 4.2%, and pays the principal and interest on a monthly basis. According to the above formula, the monthly repayment of principal and interest is 1233.5438+04 yuan.
The above results only give the sum of the principal and interest payable each month, so it is necessary to decompose this sum of principal and interest. Still on the basis of the above example, one month is one installment, the balance of the first loan is 200,000 yuan, the interest payable is 700 yuan (200,000× 4.2%/12), the principal is 533. 14 yuan, and the bank loan is still 19466.86 yuan; The interest payable in the second phase is (199466.86× 4.2%/12).
Refund method
That is to add up the total principal and interest of the mortgage loan, and then distribute it evenly to each month of the 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. This method is the most common and recommended by most banks for a long time.
Matching principal and interest repayment method refers to the borrower's equal repayment of loan principal and interest 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.
The average capital repayment method means that the borrower repays the loan principal with the same amount (loan amount/loan months) every month, calculates the loan interest according to the remaining loan principal at the beginning of the month, and settles it every month, and the sum of the two is the monthly repayment amount.
computing formula
Monthly repayment amount = [loan principal × monthly interest rate ×( 1+ monthly interest rate) repayment months ]=[( 1+ monthly interest rate) repayment months-1]
Deduction of repayment formula
Assuming that the total loan amount is A, the monthly interest rate of the bank is β, the total number of installments is M (months) and the monthly repayment amount is X, the monthly loan owed to the bank is:
The first month A( 1+β)-X
Second month (a (1+β)-x) (1+β)-x = a (1+β) 2-x [1+β)]
The third month [a (1+β)-x] (1+β)-x] (1+β)-x = a (1+β) 3-x [1+]
It can be concluded that the loan owed to the bank after the nth month is a (1+β) n _ x [1+(1+β)+(1+β) 2+? +( 1+β)^(n- 1)]= a( 1+β)^n _x[( 1+β)^n- 1]/β
Because the total repayment period is m, that is, all bank loans have just been repaid in the m th month.
So there is a (1+β) m _ x [(1+β) m-1]/β = 0.
x = aβ( 1+β)m/[( 1+β)m- 1]。
Repayment method and calculation of average capital
1. Repayment amount of equal principal and interest repayment method:
Monthly repayment amount: a * [I * (1+I) n]/[(1+I) n-1]
(Note: A: loan principal, I: monthly loan interest rate, n: loan months)
2. Average capital repayment method repayment amount:
Monthly principal repayment: None
Monthly interest payable: 30 days
Total monthly payable: a/n+ an*i/30*dn.
(Note: a: loan principal, i: monthly loan interest rate, n: loan months, an: remaining loan principal in the nth month, a 1=a, a2=a-a/n, a3 = a-2 * a/n ... The actual number of days in the nth month of dn and so on, for example, February in a normal year is 20.