1. Is it cost-effective to pay off a store loan in advance? How is interest calculated?

As for early repayment, for example, if your loan is for 10 years and uses principal and interest, well, then it is more cost-effective to repay early in the first 5 years because the interest is in the first 5 years. It is basically repaid at that time, and if you repay it in the next five years, it will be the principal repayment.

2. Is it cost-effective to pay off a commercial loan early?

The shorter the term of the loan, the less interest paid in the monthly payment. If you plan to repay your loan early, then of course the shorter the loan term, the better. So 10 years is appropriate, and if possible, 5 years is also fine.

3. Is it cost-effective for a store to repay its loan in advance?

A good deal. In theory, early repayment will definitely reduce interest expenses, but you need to check whether there is an agreement on early repayment in the loan contract. If there is a default clause, you need to see whether there are penalties for early repayment. If the penalties are too heavy, you need to weigh whether to pay early. Repay the loan.

1. There is less interest in the middle and later stages of repayment, so there is no need to repay in advance. For citizens who choose equal principal repayment, if 1/3 of the repayment period has passed or for buyers who have repaid to the mid-term, due to The equal principal amount is to divide the total loan amount into equal principals, and the repayment interest is calculated based on the remaining principal. In other words, the later this repayment method reaches, the less principal will be left, and therefore the less interest will be generated. In this case, there is little point in repaying the loan early.

4. Is early repayment of a commercial loan appropriate?

Whether early repayment of a commercial loan is appropriate depends on the repayment method and loan term chosen by the repayer. There are two repayment methods for commercial loans, one is the repayment method of equal principal and the other is the repayment method of equal principal and interest. The repayer needs to make an analysis based on the actual situation.

The minimum term of a commercial loan is 1 year (inclusive) and the maximum term shall not exceed 30 years. If the repayer goes to the bank to apply for early repayment after one year, no matter which repayment method the repayer adopts, it will be appropriate. Although the bank will charge liquidated damages from the repayer, the liquidated damages charged by the bank are less than the total interest.

If the repayer goes to the bank for early repayment after 10 years, it is appropriate for the repayer to use equal principal repayment. Because of the equal principal repayment method, the proportion of the principal each month will not change, and the repayer has repaid a large amount of principal in 10 years.

If the repayer goes to the bank for early repayment after 20 years, it will be inappropriate no matter which repayment method the repayer adopts. Because the repayer has already repaid most of the loan interest, the remaining balance is almost the principal with very little interest.

The most appropriate time for early repayment is in the early stage of the loan, when the repayer does not need to repay future loan interest; the most inappropriate time is at the end of the loan, when the repayer has already repaid a large amount of the loan. Partial loan interest.