Nine repayment methods of loans.
1. Pay interest once and repay the principal when it is due.
On the successful day of the loan, the interest will be deducted in one lump sum, and the principal will be repaid at maturity.
1. Scope of application
Suitable for short-term private loans.
2. Advantages
For lending institutions, part of the funds can be recycled.
3. Shortcomings
Borrowers have high costs and do not support the law of paying interest in advance.
2. Pay interest on a monthly basis and repay the principal when due.
Only pay interest every month, and return the loan principal in one lump sum when the loan expires.
1. Scope of application
Suitable for short-term loans, suitable for borrowers who usually have no cash inflow or little cash flow, such as engineering, planting and aquaculture.
2. Advantages
For the borrower, there is no repayment pressure at ordinary times, and the funds can be used for business projects.
3. Shortcomings
For lending institutions, this kind of loan is more risky than monthly repayment.
3. Pay interest monthly and repay the principal quarterly.
Pay interest every month and repay the principal every three months.
1. Scope of application
Suitable for loans in engineering, planting and aquaculture. Because the cash flow of such loans is not continuous, but intermittent. Planting will have cash flow after a crop is sold when it is mature, aquaculture will have cash flow after a batch of livestock is sold, and engineering industry will pay after the settlement period. This repayment method is basically consistent with the cash flow characteristics of these industries.
2. Advantages
The repayment interval is long, so the borrower has a long time to prepare to repay the principal.
3. Shortcomings
(1) Compared with the monthly repayment method, the loan risk is greater;
(2) The repayment time is fixed, sometimes inconsistent with the expected cash inflow.
Fourth, average capital.
Average capital refers to dividing the loan principal by the number of repayment months, returning the fixed principal every month and paying the interest on the remaining principal. The loan interest decreases with the decrease of loan principal, and the total repayment amount decreases with the decrease of interest. This loan can be repaid in advance.
1. Scope of application
It is suitable for industries and borrowers with continuous cash inflow. The cash inflow in the early stage is large and then decreases. For example, in the case of operating a car loan, when a new car is put into operation, the maintenance fee is low and the income is high, and then the cost will increase with the operation of the vehicle, and the income will decrease, which is consistent with the repayment method in the average capital. This method is also applicable to commodity circulation industry, service industry and processing manufacturing industry.
2. Advantages
(1) The loan is repaid on a monthly basis, the loan balance is decreasing, and the loan risk is decreasing;
(2) For the borrower, the pressure to repay the loan every month is small and easy to repay, which can avoid the huge one-time pressure.
3. Shortcomings
(1) If the borrower is a quality customer, the loan will be reduced and the interest will be reduced, which will reduce the income of the lending institution;
(2) For borrowers, with the gradual repayment of loans, less and less funds are used and the utilization rate of funds is not high.
5. Equal principal and interest
First, determine the monthly repayment amount, calculate the interest payable in the current month, and then subtract the interest payable in the current month from the determined repayment amount, which is the repayment amount of the principal, and calculate the interest for the next month according to the remaining principal. This loan can be repaid in advance.
1. Scope of application
Used in industries and borrowers with continuous cash inflow, and the cash is basically uniform, mainly used to supplement working capital and increase inventory. Such as commodity circulation, service industry, processing and manufacturing industry, etc.
2. Advantages
Average capital.
3. Shortcomings
Average capital.
6. Equal benefits
Divide the loan principal and interest to be paid within the loan term by the number of repayment months, and return the fixed principal and interest every month. Under this repayment method, because the interest paid in advance is lower than the actual loan interest, borrowers are generally not allowed to repay in advance, and interest will be charged if they repay in advance.
1. Scope of application
It is mainly used for industries and borrowers with continuous cash inflow, and the cash is basically uniform, which is used to supplement working capital and increase inventory. Such as commodity circulation, service industry, processing and manufacturing industry, etc.
2. Advantages
(1) The loan is repaid on a monthly basis, the loan balance is decreasing, and the loan risk is decreasing;
(2) For the borrower, the pressure to repay the loan every month is small and easy to repay, which can avoid the huge one-time pressure.
3. Shortcomings
(1) If the borrower is a quality customer, the loan will be reduced and the interest will be reduced, which will reduce the income of the lending institution;
(2) For borrowers, with the gradual repayment of loans, less and less funds are used, and the utilization rate of funds is not high;
(3) Generally speaking, this kind of loan cannot be repaid in advance, and the borrower must use the loan when the funds are sufficient, which increases the cost of the borrower and reduces the efficiency of the use of credit funds.
Seven, the early monthly interest payments, the average debt later.
This repayment method pays interest in the first few months and repays the principal and interest in the next few months.
1. Scope of application
This kind of loan is suitable for investment loans. Investment industries include commodity circulation, service industry, processing and manufacturing industry, etc. Because there is no cash inflow during the investment period, it will be more difficult to repay at this time. After the investment is completed, these industries will continue to generate cash inflows, and repayment will have sources; It is also suitable for industries with obvious off-season. In the peak season, borrowers need funds and repayment is under pressure. There are abundant funds in the off-season, which can be used for repayment.
2. Advantages
This kind of loan is aimed at the borrower's industry and cash flow characteristics, conforms to the borrower's cash flow law, and is easily accepted by the borrower.
3. Shortcomings
Because the principal was not repaid in the early stage, the repayment of the principal was postponed to the later stage, which increased the repayment amount, thus increasing the repayment pressure of the borrower.
Eight, the approved maximum amount, with the loan.
In a period of time, lending institutions give borrowers the highest credit line. During this period, the borrower can get a loan at any time within the maximum credit limit, and can also repay the loan at any time.
1. Scope of application
Suitable for borrowers with uncertain or uncertain cash flow in the future.
2. Advantages
Borrowers can borrow and repay at any time according to their own needs, which is convenient and flexible and simplifies the procedures.
3. Shortcomings
Because the loan risk assessment is generally not done during the credit period, when the borrower's situation changes, the lending institution will still give the loan without knowing it, which increases the risk of the loan. Therefore, this kind of loan needs to be checked after the loan, or simplified evaluation before each loan.
Nine, loans, irregular repayment
If the loan is granted to the borrower in one lump sum, the borrower can repay all or part of the loan at any time according to his cash flow income before the loan expires. It can be planned at one time or repaid in installments. If the loan is repaid in multiple installments, the repayment amount of each installment is determined by the borrower.
1. Scope of application
Suitable for borrowers with uncertain cash flow or uncertain future.
2. Advantages
Borrowers can arrange repayment according to their own cash flow income, which has great flexibility compared with fixed transfer time.
3. Shortcomings
Because the borrower decides to repay the loan before the loan expires, it is possible for the borrower to delay the repayment as much as possible, thus increasing the loan risk.
At present, many companies will deduct interest from successful loans, but the law of paying interest in advance does not support it. For example, within three months after the loan term, some will deduct the interest for many months, and some will deduct it one month in advance, according to the regulations of each company.