There are two repayment methods for individual housing loans:

Equal monthly principal and interest repayment and equal monthly principal repayment.

The characteristic of matching principal and interest is that the monthly repayment amount remains unchanged throughout the repayment period. Lenders can accurately grasp the monthly repayment amount and arrange family expenses in a planned way.

The characteristic of average capital is to share the principal evenly throughout the repayment period, and calculate the interest on a daily basis according to the loan principal balance. The monthly repayment amount decreases gradually, but the repayment rate remains unchanged. This method is more suitable for borrowers who have strong repayment ability at the initial stage and want to return a large amount at the initial stage of repayment to reduce interest expenses.

If you plan to repay in advance, it is more cost-effective to use average capital.

Precautions for prepayment:

Partial or full prepayment of individual housing loan means that the borrower repays a certain amount or all of the loan in advance on the basis of ensuring monthly repayment of the principal and interest of individual housing loan, so as to achieve the purpose of "shortening the repayment period and reducing interest expenses".

At present, personal housing provident fund loans and some commercial personal housing loans have been launched in advance, allowing borrowers to change their repayment plans and repay part or all of the loans in advance. However, due to the early repayment of loans, especially some loans, it is necessary to revise and calculate the loan term and loan balance agreed by the three parties in the original loan contract, which is complicated to operate. Borrowers need to know the following terms:

1. The borrower can only propose to repay part or all of the loan in advance for the first time after 12 months of normal repayment of the loan principal and interest;

2. Lending institutions have set a minimum amount for prepayment of some loans, which generally needs more than 65,438+0,000 yuan;

3. The general borrower needs to notify the lending institution to repay the loan in advance, and must submit a written application to the lending institution with the original loan contract, monthly statement, my ID card and other materials, which is approved by the lender;

4. The borrower still needs to repay the original monthly loan principal and interest repayment amount in the current month, and deposit the loan amount to be repaid in advance into the bank savings card. After confirmation, the lending institution will recalculate the loan balance and the final repayment period after repaying part of the loan in advance according to the interest-bearing repayment method determined in the original loan contract and the calculation principle of "interest first, capital later, equal monthly reduction and shortening the repayment period", and sign a "loan change contract" with the borrower again. Whether to repay part or all of the loan in advance, the borrower must go to the bank to repay the loan in advance within the time specified by the lending institution.

If all the loans are paid off in advance, the insurance company can refund the premium in advance. After the borrower repays all the loans in advance, the lending institution will also return the original personal housing loan and housing insurance policy kept by the lending institution to the borrower. However, because the borrower has paid off all the insurance premiums during the loan period in one lump sum when handling the loan, the individual housing loan contract in the original Home Insurance was terminated early at this time. According to the regulations, the borrower can bring the original insurance policy and proof of paying off the loan in advance and return the premium to the insurance company in advance on a monthly basis. Paying off the loan in advance and returning the insurance premium should be calculated according to whether the original house is an existing house or an auction house and the actual insurance payment period of the auction house.