How many repayment methods are there for street shop loans?
Generally speaking, there are the following types:
1. Equal principal and interest repayment method: This method is commonly used at present and recommended by most banks for a long time. 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.
2. average capital Repayment Method: The so-called average capital Repayment Method, also known as the debt service method and average capital Repayment Method. The lender will allocate the principal to each month and pay off the interest from the previous trading day to the repayment date.
3. One-time repayment of principal and interest: previously, the bank stipulated that if the loan term is within one year (including one year), the principal and interest will be repaid in one lump sum at maturity, and the interest will be paid off together with the principal. However, with the change of repayment method, the one-year period is expected to be extended to 5. This method is strictly approved by banks and is generally only open to small short-term loans.
4. Equal increase and equal decrease: There is no essential difference between these two repayment methods, which is another variant of equal principal and interest repayment method. It subdivides the repayment period, and in each subdivision unit, the repayment method is equivalent to the equal principal and interest. The difference is that the repayment amount of each time division unit may be increased or decreased equally.
5. Repayment of principal and interest on schedule: Lenders can negotiate with banks to decide to set different repayment time units for repayment of loan principal and interest. That is, decide to repay once a month, quarterly or annually. In fact, depending on the financial situation, the lender collects the money to be repaid every month for several months. The "quarterly repayment" business launched by China Merchants Bank belongs to this range.
6. Principal repayment plan: After consultation with the bank, the lender will repay the principal at least 1 000 yuan each time, with the interval between two repayments not exceeding 1.2 months, and the interest can be repaid monthly or quarterly.
Which repayment method is cost-effective for street shop loans?
1. Equal repayment of principal and interest is also flawed. Due to the long-term occupation of bank funds, the total repayment interest is higher than the average principal repayment method to be introduced below. Compared with the matching principal and interest, the matching principal repayment has a lower total interest expenditure, but the principal and interest paid in the early stage are more, and the repayment burden decreases month by month.
2. The repayment method of one-time repayment of principal is simple to operate, but it is suitable for a narrow audience. It must be noted that this method is easy to make the lender lack the external force of repayment, resulting in credit damage. With this kind of loan, the lender has better self-arrangement ability.
3. Several repayment methods have their own characteristics, but they are all aimed at groups with different characteristics. So you can't absolutely judge which method to convert. It depends on the lender's own situation. For equal principal repayment, the burden at the beginning of the month is heavier than the equal principal and interest. This method is very suitable for people who have higher income at present, but predict that their income will decrease in the future.