Early repayment means that the borrower applies to the bank to repay part of his loan in advance, and guarantees that the loan will be repaid in the current month without being overdue last month; Pay off all or part of the loan in one lump sum according to the date stipulated by the bank.
Will prepayment shorten the service life?
Yes, most banks support prepayment to shorten the term, but there are several options, as follows:
1, fixed monthly supply will shorten the service life. This method will not increase the lender's current repayment pressure, because a part of the principal is repaid in advance, and the actual interest expenditure will definitely be less, which is suitable for lenders with stable jobs and certain deposits.
2. The increase of monthly payment shortens the service life, that is, the lender shortens the actual repayment period and increases the monthly payment, so that the repayment time of the loan can be advanced, because the time occupied by funds is less, and the interest expense will definitely be reduced, but it is not suitable for everyone. After all, the repayment pressure will naturally increase with the increase of monthly payment.
3. Reduce the monthly payment and shorten the repayment cycle. Although the lender shortens the repayment period, it may increase the pressure of subsequent repayment, so it may apply for reducing the monthly payment. However, if the monthly payment is less, the repayment period will be extended to some extent, but it will be shorter than the original period.
It should be noted that no matter which of the above methods is chosen to repay the loan in advance and shorten the service life, it is necessary to re-sign the loan contract with the bank and meet the requirements of the bank. Most banks have to pay back more than 1 year before they can repay the loan in advance. Each bank may have different requirements. It is best to consult the loan bank before repaying the loan in advance.
How to handle prepayment and what are the requirements for prepayment?
First, the borrower can only propose to repay part or all of the loan in advance for the first time after six months of normal repayment of the principal and interest of the loan;
Second, for serious loan management, lending institutions have set a minimum amount for early repayment of some loans, which generally needs more than 6,543,800 yuan;
Third, the borrower generally needs to notify the lending institution 18 days or 15 days in advance to repay the loan in advance, and must submit a written application to the lending institution with the original loan contract, bank repayment savings card, monthly statement of fund repayment, my ID card and other materials, which must be reviewed and approved by the lender;
Fourth, the borrower still needs to repay the original monthly loan principal and interest repayment amount in the current month, and at the same time deposit the loan amount to be repaid in advance into the bank savings card.