In fact, the repayment method of equal principal and interest is to evenly distribute the total interest of your loan to the monthly payment. The interest of equal principal and interest in the early stage of monthly payment accounts for the majority, and the loan interest ratio is as high as 70%~80%. Therefore, if you prepay for 65,438+00 or 65,438+05 years, the loan interest has been repaid almost, and it is obviously not cost-effective to prepay again.
If the repayment method of equal principal and interest is selected in the current loan, and it has been repaid in advance for more than 65,438+00 years, it is neither cost-effective nor necessary to repay in advance again. After all, most of the interest has been returned to the bank. Anyway, the loan interest has been paid off, and it is definitely better to continue to repay by installments. On the other hand, if you choose the repayment method in average capital, even if you have borrowed for more than 10 years, it is a wise choice to choose early repayment, so that you can pay a lot less interest, get rid of house slaves in advance and live a debt-free life.
From the above statement, for those who repay in 10 or 15, should they repay in advance? In addition, whether it is cost-effective to repay in advance depends on everyone's loan situation, economic situation and loan method.
In short, whether to prepay in 10 needs to be judged according to the actual situation, such as:
1. If the borrower uses the repayment method of equal principal and interest, and wants to make a one-time repayment in advance, it is necessary to first check whether the loan bank will charge liquidated damages. If the residual interest is more than the liquidated damages for prepayment, it is more cost-effective. If the penalty is higher than the remaining loan interest, it is not suitable for prepayment.
2. If the borrower uses the average capital repayment method, it is not suitable for one-time prepayment, because the interest on average capital is different every month, and the interest paid in the early stage will be more, and the interest will be less and less as time goes by. The loan period of 10 years is relatively short. If the borrower has repaid the loan for several years, he has almost paid off the loan interest in the early stage, and the rest is the principal. If you choose to repay the loan in advance, you will lose money.