What is more advantageous to reduce the term of a loan or the monthly payment for a loan?

What is more advantageous to reduce the term of a loan or the monthly payment for a loan?

  • The shorter the loan term, the more you pay, but the sooner you cancel the debt. I think that this option is optimal, if you are sure that you can save on something, but it's faster to get rid of financial bondage.

    If there is no such possibility, then the debt is extended for a longer time, but you make payments affordable for yourself, plan expenses, taking into account your debt.

  • It is more advantageous to reduce the term of the loan, since the interest on the use of the loan is accrued on the residual amount. The longer the period, the greater the overpayment. You can simply pay more than the specified monthly payment, and the payout period will decrease, and you will pay less.

  • Under the current legislation, there is currently no moratorium on partial or full early repayment of the loan. In other words, if you decide to repay some (or all) of the loan ahead of schedule, the bank can not prevent you from doing this, let alone apply any penalties. If your current financial condition allows you to partially repay the loan - you need to do this. From my point of view, it is more profitable to reduce the amount of a monthly payment. In order for the bank to write you off, you mustnecessarilyWrite a statement to the bank about your decision to make a partial early repayment of the loan. After that, the amount claimed will be written off of the main debt and the redemption schedule is recalculated. The main debt, and therefore the monthly payment will decrease. The procedure for partial early cancellation can be made as many times as you require. You will reduce the calculated monthly payment, reducing the monthly credit burden on your budget, which means that you will have more financial opportunities for the next early write-off.

  • More favorable are those loan conditions that are suitable for your conditions and the possibilities of repaying this loan. If you take a mortgage interest on 5 per annum, I would take years for 25-30. And if you take a consumer loan for 1% per day, I would take on 1 a day at most.

  • it all depends on your life situation. Today everything is fine, and tomorrow someone was fired from work. and there is no money not to shorten the term, but also to pay a monthly payment. it is better to save up and lower the amount of the monthly payment so that it is convenient to pay without fear of the future. and if the situation changes and you have the finance, then you can pay the amount more, thereby repaying the loan ahead of time

  • See the contract with the bank. If you are told that you are obliged to pay for the 3 year with the loan body and interest, say, 500 thousand, without the right to change the terms, then you are for 3 years, that for 2 you pay these 500 thousands, and also penalties for early repayment can be specified. You are a source of income for a bank, giving you a loan, it has fully calculated its profit, and if it is specified as 200 thousand for 3 years, then the bank will receive it exactly and wants it. If you want to reduce the term of payment, choose such a contract (if you will find it), on which it is possible, there it is roughly agreed that interest is accrued on the remaining loan amount, a monthly minimum payment is determined, and all that is higher is your benefit by reducing the payment percent. For anyone, ask the bank if it is possible for you to pay in large amounts and repay the loan ahead of schedule - so you will save on these same percentages.

  • With a partial repayment of the loan, you can calculate how to reduce the monthly payment, and to shorten the loan period.

    The first option is more profitable for the bank, so the bank employees will go to it with great enthusiasm, since the interest you pay for using the money for the duration. But you know better how to do it. If the situation allows to make the same monthly payment (as well as to partial repayment of the loan), it is better to shorten the term of the loan agreement. So you can win on a percentage. If you are not sure of your financial stability, it is better to reduce the monthly payment. So there will be less likelihood of delay in the loan agreement, which may entail a penalty and a fine.

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