With the development of Internet finance, web-based lending products, such as Internet-based loans and loans, have become the preferred option for many people to finance and can easily and quickly solve the financial problems of individuals or businesses. However, after the borrower has received the loan, early repayment may be required for various reasons. So, how does the Internet lender pay in advance? The analysis below is presented from several angles。

How does the Internet lender pay in advance

I. Rationale for early repayment

The rationale for early repayment needs to be understood before starting with an explanation of how to proceed. In general, the lending institution will account for the return on the loan, or so-called “interest on the loan”, at the beginning of the loan. In the case of differences in the principal of the loan, the monthly interest is also different, and the monthly principal and interest are distributed in proportion。

If the borrower repays the entire loan in advance, then the lending institution loses a share of the gain by paying in advance, which reduces interest expenditure. Thus, in order to compensate for this part of the proceeds, the lending institutions sometimes charge a certain amount of “early repayment default”, which is generally calculated on the basis of a percentage of the amount paid in advance。

II. Advance repayment terms for online loans

Online loans are not readily available for early repayment. The specific conditions are as follows:

1. Internet-based loans, after at least one repayment cycle, at which interest is paid on a monthly basis, are calculated on the first repayment date of each month from the date on which the loan is made。

2. Loans of up to $10,000 do not support early repayment。

3. Loans with a monthly equivalent principal interest rate may be repaid in advance after at least three months. There is no limit on the repayment period if the interest is paid monthly and the repayment due is due。

4. Request an advance repayment from the Internet lender one working day prior to each repayment date。

5. ALL BORROWINGS ARE SUBJECT TO A ONE-TIME OR PARTIAL EARLY REPAYMENT AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF 2%。

III. Advance repayment process for Internet-based lenders

The online loan early repayment process is relatively simple, with the following steps:

1. Enter the Internet-based loan platform and choose to “operate” to “pay back” to “pre-pay back”。

2. To submit an application upon completion of the advance payment, the online loan platform will automatically account for and display default money。

3. Select the repayment method and complete the payment of the treasure or the bank wire transfer, pending confirmation by the Internet lender。

4 Upon confirmation of early repayment by the Internet lender, advance repayment will be completed and the amount paid in advance and the default payment will be ensured。

IV. Pre-payment advantages and disadvantages

Early repayment has its own advantages and disadvantages:

Advantages:

1. The repayment pressure of borrowers could be reduced

2. The risks faced during the repayment period can be reduced, such as changes in loan rates

3. Advance repayments can also increase the credit rating of individuals or enterprises。

Disadvantages:

1. Advance repayments generate a certain amount of early default, which increases the cost to the borrower

Early repayment reduces the proceeds of the lending institution, which may result in some corresponding reduction in credit or increase in the interest rate of the loan。