Prepayments look at matching the principal cost-effective loan 4:00 reminded

People's Bank of China from March 17, 2005, commercial banks self-adjustment of individual housing loans policy. The new policy is the most direct impact on the individual housing loan interest rate has increased to more than five-year housing loans as an example, its lower interest rate loans to 6.12 percent benchmark interest rate of 0.9 times (5.51 percent), than the current lending rate 5.31 percent 0.20 percentage points higher. According to media people related to the 1767 survey, 981 people chosen in the central bank interest rate adjustments, will be prepayments, the ratio had been accounted for 55.52 percent of the survey. Prepayments, has become the most buyers respond to the major means of raising interest rates.

Prepayments for buyers of this situation, the reporter visited the banking professionals to understand that if buyers prepayments, in the form of loans on the choice it is particularly important. The current loan form of "matching the principal repayment" and "matching the repayment of principal and interest," the two. "Matching the repayment of principal," the monthly repayment of principal remain unchanged, interest rates gradually decline, which if you choose prepayments, the return of principal, interest payments on reduced and "matching the repayment of principal and interest," each On the same amount of reimbursement, in the early reimbursement of the greatest interest payments, principal at least, after gradually reducing interest payments, principal of a gradual increase. For the same margin loans after some time, "matching the repayment of principal and interest" to pay the interest will be higher than that of "equal principal repayment Law," in prepayments when interest payments are not refundable, and this relative Many did not pay a lot of interest should be paid in advance. Therefore, if buyers want to advance repayment, "matching the principal repayment of" relatively more favorable.

Matching the total interest on the principal repayment less

We adopted the following cases can be very clear:

Mr. Lai to the bank loan-to-50 million loan period is April 2004 -2014 in April a total of 120. Is now also a one-year, which has returned a 12, one-time repaid all. We can see that by matching the principal way than the way the principal and interest payments equal the total interest paid less:

29562.16 yuan -29197.50 dollar = 364.66 yuan

Another case is part of early repayment, that is part of a year in advance repayment, repaid over five years, the principal of equal than the beginning of the repayment of principal and interest equal to the amount, therefore, by way of matching the principal and interest each year 80,000 yuan, Just also the fifth year the remaining principal 55256.65 yuan, and finally, the need to pay for the interest of 80884.82 yuan. By matching the principal mode of 60,000 yuan each year, also only the fifth year the remaining 10,000 yuan principal, and finally, the need to pay for the interest of 78667.50 yuan. This can be seen by matching the principal way than the way the principal and interest payments equal the total interest paid less:

80884.82 yuan -78667.50 dollar = 2217.30 yuan

This shows that the early repayment of choice if you are using the matching than the principal amount of the loan applications by matching the principal and interest for the loan to cost-effective.