Will the provident fund repay the loan year by year? Annual repayment of provident fund means that employees who apply for housing provident fund loans (including the housing provident fund loan part of portfolio loans) in this city apply to the management department, and the management department withdraws housing provident fund from the employee housing provident fund deposit account once a year and transfers it to the employee repayment account to repay the principal and interest of housing provident fund loans.
The annual loan repayment business refers to that the applicant goes to the management office to handle the annual loan repayment application and confirmation procedures before the last month of the loan repayment month. The management office automatically withdraws the housing provident fund from the applicant's housing provident fund deposit account every year, transfers it to the agreed repayment account, and returns the principal and interest of the housing provident fund loan.
Its advantage is that employees only need to declare and sign an agreement with the management once during the loan period, and then the management will automatically handle the deduction and transfer procedures of housing provident fund loans through the management system every year, with simple procedures and processes.
What is the difference between monthly repayment and annual repayment? Monthly repayment and annual repayment are suitable for different people.
1. You can use the monthly provident fund to make monthly repayment, but you must keep the balance of 12 times of the monthly provident fund in the employee provident fund account, and during the whole repayment period, the repayment plan remains unchanged and the interest to be repaid has not decreased. Therefore, monthly payment is more suitable for employees who want to reduce the pressure of monthly payment, such as young employees who have just joined the work and feel the pressure of monthly payment.
2. Repaying the loan year by year compensates the loan principal, reduces the interest expense of future loans, and speeds up the repayment. Therefore, repaying loans year by year is more suitable for employees who want to reduce loan interest expenses. For example, employees with relatively stable income feel less pressure to repay loans.
These two methods have their own advantages. However, from the perspective of saving money, it is more economical to withdraw and repay the loan year by year. Because, the provident fund withdrawn by monthly repayment will repay the principal and interest of the loan every month, and the interest on the remaining unpaid principal will continue to be calculated, while withdrawing repayment year by year will return part of the loan principal in advance. According to the principle of "interest is repaid with the principal", the interest of this part of the principal returned in advance will not be repaid, which reduces the loan interest expenditure.
Therefore, for those who need to share the burden of repaying loans every month, such as young people who have just worked for a long time, they can consider entrusting them to withdraw loans every month, while those who have worked for many years and have a stable income may wish to consider repaying loans year by year and paying less loan interest. It is recommended that citizens read the terms carefully before handling and consult the loan bank for the unclear part of the agreement.
The above is about the difference between monthly repayment of provident fund and repayment of loan year by year. Please choose to repay the entrusted loan year by year or month according to your actual situation.