Commercial loans can be repaid in advance. 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.

However, owing on the loan in advance will charge a certain penalty interest and handling fee, but the total interest payment will also be reduced after repayment in advance.

The analysis is as follows:

1. Calculation of prepayment interest: interest, default interest and related expenses incurred from the previous repayment date to the prepayment date.

2. Prepayment fee: the fee ratio is 3%-5% of the remaining principal.

3. There are generally five steps to repay the loan in advance.

A, let's look at the provisions on prepayment in the loan contract. When looking at the contract, we should pay attention to whether it is necessary to pay a certain penalty for repaying the loan in advance.

B. Call the loan bank to inquire about the department location and telephone number of prepayment and the conditions required for prepayment.

C. Call according to the consultation telephone number or go to the relevant department in person to apply for prepayment.

D. The borrower himself goes to the borrowing bank with relevant documents and fills in the prepayment application form.

E. Submit the prepayment application form and deposit the prepayment amount in the counter.

Extended data

According to the different repayment methods, the borrower can choose to reduce the term or amount.

1. prepayment, that is, the customer pays off all the remaining loans at one time. (There is no need to repay the interest, but it will not be refunded if it is paid)

2. Some loans are repaid in advance, and the monthly repayment amount of the remaining loans remains unchanged, shortening the repayment period. (save more interest)

3. Partial prepayment, the monthly repayment amount of the remaining loan is reduced, and the repayment period remains unchanged. (Reduce the monthly payment burden, but less than the second type)

4. For partial prepayment, the monthly repayment amount of the remaining loans will be reduced and the repayment period will be shortened. (save more interest)

5. The total principal of the remaining loans remains unchanged, but the repayment period is shortened. (The monthly payment will increase and the interest will decrease, but it is relatively uneconomical.)

References:

Baidu Encyclopedia: Repaying the loan in advance