A friend who is considering a home purchase loan may have a question: is it a wise choice to pay early for a flat with an equivalent interest? First, let me explain the equilibria. Simply put, it is a form of repayment of principal and interest on loans in fixed amounts per month. This period is usually 10 years, 20 years, etc. So the question now is, should we pay in advance? Is it worth spending our wages on a loan that should have been on another scheme

Would it be appropriate to pay early for the purchase of a flat with an equivalent interest

In fact, it would not be advisable for loans with an equivalent principal to be repaid in advance at the middle of the loan term. Why? Because loans with an equivalent principal are repaid at a certain rate per month. Most of the initial period was the payment of interest, with more principal payments beginning over time, while the interest component gradually decreased. That means that in the medium term, you've already paid most of the interest, and there's really no big benefit in paying back early。

You need to know a few of its advantages, in addition to its concept of loan, in choosing the way to repay the equivalent. First, family budgets and planning have become much easier because of the fixed monthly repayments. Second, the equivalent interest rate would reduce the pressure on prior-period repayments, as most payments were initially made for interest. Finally, the equivalents are appropriate for those with a stable income, as they are able to develop the best monthly repayment plan in the context of established income。