Average capital refers to the repayment method of loans, that is, the total loan amount is divided into equal parts during the repayment period, and the same amount of principal and interest generated by the remaining loans in 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.
Is it worthwhile for the average capital to repay the mortgage in advance?
Very cost-effective. After the general capital loan is repaid in advance, you can choose to shorten the repayment period and reduce the monthly payment, both of which will reduce your total interest burden. If you want to reduce the interest burden as much as possible, I suggest you shorten the repayment period. If you feel that the repayment pressure is relatively high, you can choose to reduce the monthly payment.
Ways and procedures of repaying loans in advance
1, please repay all the loans in advance. It is undoubtedly the best to repay all the loans at one time, which can save a lot of interest, but the interest already paid is non-refundable.
2. Partial prepayment, the remaining monthly repayment amount remains unchanged, and the repayment period is shortened, which can reduce a lot of interest.
3. Partial prepayment, the monthly remaining repayment amount is reduced, but the repayment period remains unchanged, which can reduce the monthly payment and relieve the pressure.
4. Partial prepayment, the remaining loan not only reduces the monthly repayment amount, but also shortens the repayment period and saves a lot of interest.
Here is a reminder, as long as you think you can repay in advance within five years, it is best to use the average capital method, because the interest paid by the previous matching principal and interest method is too large and relatively uneconomical.