Whether to choose early repayment is best decided according to the actual situation. For example, if it is a mortgage, if your house has greatly appreciated during the loan period, it is very cost-effective to choose to pay off the loan in advance, put the house into the second-hand market, or reinvest it in the mortgage.
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.
Prepayment is generally divided into two ways: partial prepayment and full prepayment.
According to the different repayment methods, the borrower can choose to reduce the term or amount. It is understood that at present, most banks can provide five ways to repay loans in advance for customers to choose from.
First, all loans are repaid in advance, that is, customers pay off all remaining loans at one time. (There is no need to repay the interest, but it will not be refunded if it is paid)
Second, part of the loan is repaid in advance, and the monthly repayment amount of the remaining loan remains unchanged, shortening the repayment period. (save more interest)
Third, if part of the loan is repaid in advance, the monthly repayment amount of the remaining loan will be reduced and the repayment period will remain unchanged. (Reduce the monthly payment burden, but less than the second type)
Fourth, if part of the loan is repaid in advance, the monthly repayment amount of the remaining loan will be reduced and the repayment period will be shortened. (save more interest)
Fifth, the remaining loans keep the total principal unchanged and only shorten the repayment period. (The monthly payment will increase and the interest will decrease, but it is relatively uneconomical.)
Financial experts suggest that when repaying in advance, the principal should be reduced as much as possible, the loan term should be shortened and the interest should be paid less.
From the perspective of currency liquidity, mortgage is the loan with the lowest interest and the longest time that you can borrow from the bank. In particular, housing provident fund loans, which are policy loans. At present, China's housing provident fund loan interest rate is 3.5%. Think about how you can borrow less than 3.5% for 30 years. Car loans are generally around 6% to 1 1%, and consumer loans are also above 5%. If you have the money to invest, you might as well borrow money from the bank to invest.
Many people think that it is not necessary to repay the loan in advance because money has time value, that is, there is inflation, and they think that the future will be easier after debt. But the problem is that you hold assets, which will depreciate in your hands because of inflation, that is, investment and wealth management also need to hedge inflation to get tangible benefits.
If the loan interest rate is greater than the financial yield, then the actual situation is that after offsetting inflation, the loan interest rate is greater than the financial yield. Therefore, whether to repay the loan in advance has nothing to do with inflation, otherwise you have no assets and it is impossible to repay the loan in advance.
Should I repay the loan in advance? What is the impact of prepayment?
Nowadays, whether it is mortgage, online loan or credit card, early consumption has become everyone's normal life. But because China people don't like to owe people money, many people will try to repay the loan in advance as soon as they are well off.
In the past, Dr. Kang always thought that early repayment meant strong repayment ability.
There is actually another explanation-breach of contract.
Then, if you have money, do you want to repay the loan in advance? What is the impact of prepayment?
1, prepayment by credit card
Paying back the credit card arrears in advance helps you maintain a good repayment habit, and the credit report shows that your personal credit is good. Generally speaking, because you actively repay the loan and leave a good impression on the bank, when you apply for a new credit card, the approval will be faster and it will be easier to raise the limit.
2. Early repayment of online loans
Some products can be repaid with the loan, and early repayment is not a breach of contract, so there is no penalty, which will naturally not affect personal credit. However, for some large-scale online loan products, repaying the loan in advance is a breach of contract and needs to bear the corresponding liability for breach of contract. Whether to pay liquidated damages or not, and the amount of liquidated damages depends on the specific tips and requirements of the loan application page or the IOU agreement.
Therefore, everyone must know clearly in advance when applying for online loans, so as not to be fined for breach of contract or even affect credit information.
3. Repay the mortgage loan in advance
Judging from the loan contract, early repayment is a breach of contract, and the borrower should bear the corresponding liability for breach of contract and pay a certain amount of liquidated damages as agreed in the contract. Therefore, it may have a negative impact on personal credit reporting and re-applying for loans.
It is understood that when lending institutions submit the information of users' "prepayment" to the credit information system of the People's Bank of China, they will show that they are in a "special transaction" and will not cause bad records in personal credit reports. However, some lending institutions will regard "prepayment" as negative information, which will affect the re-application for loans.
To put it bluntly, prepayment is generally to save interest, but sometimes prepayment is not cost-effective. If you are in the following situations, it is not recommended that you repay in advance:
1. Repay with the emergency fund
For lenders, raising interest rates and raising interest rates are nightmares, so they always want to pay back the money they owe to the bank when their financial ability is suitable. However, for consumers with limited economic capacity, mortgage is almost a half-life savings. Once a large sum of money is paid in advance out of panic, the original life plan will be disrupted. Once there is any unexpected situation, it may be "penny wise and pound foolish" because of economic pressure.
Two: the repayment period of equal principal and interest is over half.
According to the repayment calculation method of equal principal and interest, if the loan term exceeds half, it means that 50%-80% of all loans and interest have been repaid, and the monthly remaining principal accounts for a large proportion, with little interest. At this point, most of the money and most of the pressure have passed, and the significance of early repayment is not great. If the money is not enough, there is no need to rush to repay in advance.
Especially in the later period of repayment, there is no need to use centralized funds to repay. This not only disrupts financial planning, but also is not conducive to the effective use of funds.
Three. Average capital's repayment period has reached 1/3.
The repayment method of Average capital is to repay the principal equally every month, with decreasing interest, and it is easier to repay later. When you pay back to one-third of the fixed number of years, your mortgage interest will soon be paid off, and the remaining principal will begin to exceed the interest. If you repay in advance at this time, the repayment part is actually more of the principal, which is not conducive to effective interest savings.
Fourth, there are better investment and financial management channels.
If your funds have better investment and wealth management channels, such as investment funds, foreign exchange and other financial products, you can get a higher rate of return, and the income generated is higher than the interest saved by early repayment, then in this case, it is a good way to choose Qian Shengqian's method for mortgage repayment.
Five: enjoy preferential interest rates or discounts on loans.
If property buyers enjoy the discount interest rate, once they choose to repay the loan in advance, they will no longer be able to enjoy the discount interest rate, which is not worth the candle.
Six: provident fund loans to buy a house
If the property buyers choose the provident fund portfolio loan, after repaying the loan in advance, the provident fund will cease to be used, and will be kept at the current interest rate, and can only be withdrawn when they retire. This fund will bring too little income in the next few years.
Of course, the provident fund policy will vary from region to region. In some areas, it is allowed to withdraw provident fund to repay housing loans within one year. At this time, you can also consider using the provident fund flexibly.
In addition, mortgage is the most stable asset among all assets, and maintaining a partial loan relationship with banks is also good for credit.
For example, in many banks now, if you have a mortgage and pay it back normally for one or two years in a row, you can borrow hundreds of thousands of credit loans. Although the amount varies from bank to bank, it is generally in the range of 100 thousand to 1 million. If you want to buy a second house now, you are not eligible for a house loan, but you can get credit loan products from the bank, and the interest rate is not high, which is much better than borrowing from other channels.
But if you are in the following situations, Dr. Kang suggests that you should repay the loan in advance:
In the first case, the house is for sale.
First of all, if you want to sell a house, you need to pay off the loan first, otherwise the house will not pass the customs. Some people may want to use the buyer's down payment to pay off the mortgage and then transfer the ownership, but this will obviously increase the risk of the buyer, and it is difficult for the buyer to agree, so it is not easy to find such a buyer. If you have money, you might as well pay off the mortgage first, saving time and effort.
In the second case, the mortgage interest rate has risen sharply.
There are two kinds of mortgage interest rates: fixed interest rate and floating interest rate. If it is a floating interest rate, the loan interest rate is not static. If commercial banks raise the mortgage interest rate on their own, it will not affect the previous loans, but if the central bank raises the benchmark interest rate, even the previous loans, the loan interest rate will increase accordingly. If the loan interest rate rises sharply, it will greatly increase the loan interest. If you have money at this time, it may be more cost-effective to repay the loan in advance.
In the third case, use the house as a financing tool.
Some people buy houses as financing tools, hoping to get more loans from banks. However, due to the continuous rise of housing prices in recent years, the evaluation value of most houses has increased a lot compared with the initial purchase. If you pay off the mortgage loan in advance and get the mortgage loan from the bank, you can often get a larger loan amount in this way.
In the fourth case, I want to buy a second suite.
At present, many cities are restricting purchases. If there is a need to buy a second suite, you also need to repay the loan in advance to qualify for buying a house.
Finally, I want to tell you that whether to repay the loan in advance should be rationally chosen according to your own situation. Don't listen to the wind and rain, do more homework, understand the mortgage policy, and choose the way to maximize benefits.
How about repaying the loan in advance?
Many people have such a question, is it a wise choice to repay the loan in advance when their own economic conditions permit? I feel that everything can't be generalized, so if you want to know the advantages and disadvantages of prepayment, you should consider it from several aspects. First of all, I understand that there are three key factors to consider when individuals choose the loan amount, variety and repayment method:
(1) Debt repayment ratio, that is, the current repayment principal and interest divided by the current income.
(2) Volatility of income: If the income fluctuates greatly, you can consider repaying at least part of it in advance.
(3) Opportunity cost: If there are other investment channels and the return on investment is higher than the expected annualized interest rate of the loan, it is not recommended to repay the loan in advance, but to invest this part of the money every month, so that the expected annualized expected return on investment can be obtained. If there is no other investment channel, you can consider prepayment.
In addition, I think debt, especially mortgage, is anti-inflation. Compared with the increase of assets in the future, you will find that the interest paid is negligible, and monthly repayment of loans is also a compulsory saving behavior. You will find it difficult to save money without paying the loan.
In daily life, insufficient cash flow will lead to very serious consequences. It is suggested that if you are an employee of a public institution and you and your family are not in business, you can consider repaying part or all of your mortgage in advance; If your job involves business, it is recommended to invest some cash in business, because the price of funds is lower than the price of commercial loans.
In fact, the degree of demand for cash flow by family manifestation and invisibility also determines whether you should repay the loan in advance to some extent. If you have the goal of buying a car and other real estate or operating equipment, it is not recommended to repay the mortgage in advance; Or your parents and your spouse's parents' medical insurance is not perfect, because there is a potential cash flow demand for medical treatment. In this case, the mortgage should not be returned in advance; In addition, friends who need to study abroad or want to buy real estate for their children also suggest not to repay the loan in advance.
Should the mortgage be repaid in advance?
It is not recommended that you repay the mortgage in advance. Because mortgage interest rates is low, the loan period is the longest. As long as there is no problem with your qualifications and repayment ability, the bank will lend you money. If you apply for provident fund loans or portfolio loans, provident fund loans are not recommended to be repaid in advance. In the case of portfolio loan, if the mortgage is repaid in advance, the commercial loan must be repaid first.
Personal housing loan refers to the loan issued by the lender to the borrower for the purchase of ordinary housing for personal use. Personal housing loan business is one of the main asset businesses of commercial banks. Refers to the loan issued by a commercial bank to a borrower for the first time to purchase a house (that is, a house sold to an individual after development and construction by a real estate developer or other qualified development subject).
Personal housing loans mainly have the following three loan forms:
(1) The full name of personal housing entrusted loan is personal housing guarantee entrusted loan, which refers to the personal housing loan entrusted by the housing fund management center to commercial banks by using the housing provident fund. Housing provident fund loan is a policy personal housing loan, on the one hand, the interest rate is low; On the other hand, it mainly provides such loans to low-and middle-income workers who pay the provident fund. However, because the interest difference between housing provident fund loans and commercial loans is above 1%, both investors and ordinary people who buy houses and live in their own homes are more inclined to choose housing provident fund loans to buy houses.
(2) Personal housing self-operated loans are loans granted to individual buyers with bank credit funds as the source. Also known as commercial personal housing loans, personal housing secured loans.
(3) Personal housing portfolio loan refers to the loan issued to the same borrower with housing provident fund deposits and credit funds for the purchase of self-occupied ordinary housing, which is a combination of personal housing entrusted loans and self-operated loans. In addition, there are housing savings loans and mortgage loans.
Potential borrower
The loan object should be a natural person with full capacity for civil conduct. The borrower shall meet the following conditions:
1. Have permanent residence or valid residence status in cities and towns;
Two, a stable occupation and income, good credit, the ability to repay the loan principal and interest;
Three, with the purchase of housing contracts or agreements;
Four, do not enjoy the purchase subsidy to not less than 30% of the total price of the purchased house as the down payment; 30% of individuals who enjoy housing subsidies are down payment for housing purchases;
Five, there are assets recognized by the lender as collateral or pledge, or units or individuals with sufficient compensation capacity as guarantors;
6. Other conditions stipulated by the lender.
Is it necessary to repay the mortgage in advance?
Nowadays, life and work in society have brought great pressure to people. A large part of the pressure comes from the house where we live. As long as some people have saved enough money, they begin to think about paying back the house payment in advance. So, is it necessary to repay the mortgage in advance? Who is suitable for prepayment? Come and have a look with me.
1. Is it necessary to repay the mortgage in advance?
1, it is said that no debt is light. If the mortgage is repaid in advance, the repayment pressure will be much smaller. You know, mortgage interest is not a small sum. If it is a mortgage of one million yuan, the benchmark interest rate is equal to the repayment of principal and interest of 30, then the principal plus interest is 19 1 10,000, and the bare interest is 9 1 10,000.
Some people say that this money is good for business or financial management, but can you guarantee that you will not lose money in business? How much can you earn from stock trading? Wealth management products must be very safe. The bank doesn't want you to prepay. Napoleon once said that you should never do what your enemies want you to do. The reason is simple, because he wants you to do so.
3, and the country will raise interest rates in the future, then your repayment pressure will become even greater. Banks are smart, so it is necessary to repay in advance.
Second, who is suitable for prepayment?
1. If the loan with equal principal and interest does not exceed the loan life of 1/3, such lenders can choose to repay in advance. If the average capital during the loan period does not exceed 65,438+0/4, such lenders can choose to repay part of the loan in advance.
2. If you want to pay off the mortgage as a mortgage, or you want to cancel the mortgage and sell the house, you can choose to repay in advance. If the monthly contribution of the provident fund is high, anyway, the provident fund is only earmarked, so it is better to choose to repay in advance.
Editor's summary: Is it necessary to prepay the mortgage? Who is suitable for prepayment? I believe everyone knows something after reading the article. I hope the above contents can bring you some help and suggestions. If you need more relevant information, please continue to follow us.
Is it necessary to repay the mortgage in advance?
There is no need to repay the mortgage in advance.
First of all, this is because we are facing a certain degree of inflation. As we all know, the purchasing power of RMB in China has been declining. Because money will depreciate, and it will only become less and less valuable in the future. So from this perspective, it will be a loss to repay the mortgage in advance.
Secondly, people in our country can't actually borrow much money if they want to go to the bank for loans. Only mortgage can get such a large sum of money. If you are eager to repay the mortgage, it is equivalent to giving up the benefits of such a large loan. In addition, although the mortgage interest is higher than the deposit interest, compared with some lending institutions or peer-to-peer lending platforms on the market, it is still very cost-effective, and there is no need to rush to repay the mortgage.
Finally, choose investment and financial management. After all, many people will not be eager to save some spare money now, but will choose some wealth management products with higher returns. Although there will be some risks, it is also a high return. If you choose to use this money to repay the mortgage in advance, there will naturally be no chance to make money.
Procedures for prepayment of mortgage loans:
The general process of prepayment of mortgage is to understand the requirements of prepayment of loan contract, prepare liquidated damages-prepare materials-apply for repayment-go through repayment procedures.
First, to repay the mortgage in advance, we must first pay attention to the requirements of repaying the loan in advance in the loan contract, and whether it is necessary to pay a certain penalty for repaying the loan in advance (at present, the general bank does not charge it). If the contract indicates that liquidated damages will be collected, be sure to see clearly how much to collect and prepare this liquidated damages;
Two, the loan bank telephone consultation in advance owing on the loan application time and minimum repayment amount and other materials need to be prepared;
Third, according to the requirements of the bank, individuals apply to the relevant departments for early repayment. General banks will require customers to fill in an application form for prepayment;
4. Bring relevant certificates to the borrowing bank, go through the formalities related to prepayment, submit the prepayment application form, and deposit the prepayment at the counter.
Precautions for advance payment:
First of all, you must ask the requirements for repaying the loan in advance.
If the borrower wants to repay in advance, he must repay for more than half a year, or even individual banks require repayment for more than one year. Banks generally require borrowers to submit written or telephone applications 15 working days in advance. After the bank receives the borrower's application for early repayment, it needs to be examined and approved, so it usually takes about one month. In addition, banks have different requirements for repaying loans in advance. For example, some banks stipulate that repayment in advance is an integer multiple of 1 0,000, and some banks need to charge a certain penalty.
Second, prepayment documents need to be prepared.
If the borrower needs to repay the loan in advance, he should generally apply by phone or in writing and go through the examination and approval formalities at the bank with his ID card and loan contract. If it is a borrower who has settled all the balance, after the bank calculates the remaining loan amount, it is convenient for the borrower to save enough money to repay the loan in advance. If it is a customer or owner of the sub-mortgage business, it is best to find a professional guarantee institution to do entrusted notarization to avoid the risk that the owner will increase the price after the owner repays in advance, and the customer will not buy it or use the down payment to help the owner pay off the final payment.
Third, don't forget to surrender and lift the mortgage when repaying the loan in advance.
After the lender settles all the final payment in advance, the bank will issue a settlement certificate. The borrower can call the relevant insurance company with the original loan settlement certificate, the original policy and the original invoice issued by the bank to make an appointment to surrender. When the borrower applies for a loan, the bank will register the mortgage. After the customer settles the loan, don't forget to understand the mortgage. The borrower should bring the real estate license, settlement certificate and other rights certificate mortgaged in the bank to the office of the District Construction Committee to understand the mortgage situation. In this way, your own property can be completely your own property.