The former is better, that is, "if you choose to shorten the repayment period, the monthly repayment amount will basically remain unchanged", which means the interest will be much lower.
I have calculated that if I took a loan of 400,000 yuan in 2000 and calculated it over 20 years, I could repay the loan 50,000 yuan in advance in 2012. The former can save more than 50,000 to 60,000 yuan in interest, while the latter can only save less than 20,000 yuan in interest. many.
Supplementary information:
From the perspective of saving interest alone, shortening the loan period is definitely the most cost-effective. Choosing which way saves more money is actually very simple, as long as you master one rule: "The more principal you have to pay, the less interest you have."
If the customer chooses to shorten the loan term but keep the monthly payment unchanged, the customer's repayment cycle will speed up because the customer's monthly repayment amount will not change.
However, from the perspective of home buyers, shortening the loan period is not suitable for everyone. For buyers who choose to repay equal principal and interest, when the repayment period exceeds half of the loan period, it means nearly 80% The interest has been paid off within this period, and the remaining monthly payment is basically the principal. There is little point in shortening the term and repaying it in advance.
Extended information:
Extended information:
Prepayment is the amount paid by the borrower in excess of the monthly principal and interest payment. A prepayment that does not fully repay the mortgage is called a partial prepayment. Through contractual arrangements, early repayment is prohibited within an agreed period, which is called the lock-in period. The lock-in period ranges from 2 to 10 years.
After the lock-in period, prepayment protection often takes the form of other means, such as prepayment penalty points or yield maintenance fees. Prepayment includes three situations: full repayment in advance, partial repayment in advance and the loan term remains unchanged, and partial repayment in advance while shortening the loan term.
Loan banks can only accept applications for early repayment from borrowers starting from the second repayment month of the personal loan. Although early repayment can save interest expenses, there are four types of home buyers who are not suitable for early repayment.
Some borrowers who repay their loans early can choose two methods: one is to reduce the monthly repayment amount and keep the repayment period unchanged; the other is to shorten the repayment period and keep the monthly repayment amount. constant.
If the borrower's income continues to increase, you can choose a repayment method that shortens the loan period and realize your desire to be debt-free as soon as possible. If your income does not increase much, you can reduce the repayment amount and keep the repayment period unchanged, which will reduce the pressure of loan repayment.
It is worth mentioning that the "Early Repayment Application Form" is irrevocable once confirmed by the borrower's bank, and serves as a supplementary clause in the loan contract and has the same legal effect as the loan contract.
If the loan buyer fails to repay in advance according to the date and amount specified in the early repayment application issued to the borrower's bank for any reason, it will be regarded as overdue repayment, and the loan buyer will be charged The loan contract bears corresponding liability for breach of contract.