Consider early repayment of the loan? Under what circumstances would early payment be a wise choice

Is it appropriate to repay the loan in advance

More and more people apply for loans, which, of course, means that they have to bear the cost of interest. Therefore, some might consider early reimbursement to save interest costs. Is such an approach then reasonable

In many cases, early repayment of loans may be a wise option:

1. If you choose the repayment of the equivalent principal, early repayment of the loan would be more cost-effective. The special feature of the repayment of the equivalent principal is “the amount borrowed”。

2. If your mortgage contract is based on floating interest rates and you predict that interest rates will rise, it may be wise to repay the loan in advance。

3. You must ensure that your economy is strong enough to withstand the economic pressures of early repayment. If the early repayment of the loan increases your life pressure, we don't recommend that。

However, early repayment may not be a wise option in the following cases:

1. If you choose the repayment of the equivalent, early repayment of the loan may not be a good idea. Equities in principal repayments are mostly interest payments in the prior period, and early repayment will only cause you to lose more。

2. If your bank imposes a high default on the early repayment of the loan, the early repayment may not be cost-effective。

What if your lending agency doesn't allow early repayment? First, you need to look at your loan contract to see if there is an early repayment clause in the contract. If your contract expressly prohibits early payment, you can defend your rights through a platform of complaints. If your contract requires an advance payment to be made within a certain period of time, you can only wait. If your contract does not expressly prohibit early repayment, then you have every right to early repayment of the loan and if the lending institution refuses to provide this service, you have the right to sue them for protection of their rights and interests. If an advance payment requires a default payment, then if you are willing to pay the default payment, it can be paid in advance. Even you can negotiate the issue of default with the borrowing institution and try to reduce or waive the default。