In today’s article we will write about a very important thing. This is probably the biggest difference between an average loan and a cheap loan. In fact, this is the only way you can make cheap credit even cheaper. The key is to take advantage of the options offered by the banks and take advantage of early repayment. We’ll show you how.
First, you need a loan
This is a subject specifically that almost screams that we need accurate calculations. We thought we would show you how much you can win with a prepayment, and also the huge difference between an average loan and a cheap loan plus a prepaid “combo”. As usual, let’s call on the mortgage loan calculator , and calculate a 25-year $ 17 million loan!
The cheapest offer is Good Finance Business Home Loans – Starting Fees, K2 Category Loans. Here you have to pay back HUF 72,019 per month and THM at 2.36%. We will refund you a total of $ 22,713,990.
In the middle of the list, say, Sberbank’s Market- Based Home Mortgage is for $ 84,911 per month. The APR is $ 3,775 and the total repayment is $ 26,513,377.
Below you will find the 5-year Goodbank Market Forward Home Loan Agreement. At a rate of 5.85 percent APR, the bank expects us to pay HUF 104,492 per month and a total of HUF 32,636,620.
As we can see, the differences between the cheapest loans are 3.8 million forints and 9.9 million forints. Now come the loan prepayment!
That’s why it’s worth it!
Let’s say we have $ 100,000 a month for this project. That is why, with the cheapest loan, we are left with $ 28,000 a month, which we set aside for, say, 10 years. After a quick head count it is 10 * 12 * 28,000 = 3,360,000 HUF. Let’s say that, with profits, it should be $ 4.5 million. And then let’s calculate what happens if we put this $ 4.5 million into our credit after 10 years.
At this point, our current capital debt is around HUF 11,423,350. After the prepayment it will decrease to HUF 6,870,743. If we continue to pay only the bank loan repayment (HUF 72,019), we will credit you for a total of 222 months instead of the original 300 months (25 years).
And then let’s sum it up a bit! In the case of a K & H loan from a smooth fund, we would have repaid $ 22,713,990. If we commit to paying $ 100,000 a month for a total of 10 years, we can prepay. So we pay a total of 120 * 100,000 = 12 million forints, and then for another 102 months, we pay 72 thousand forints, which is a total of 19,344,000 forints.
That is, compared to the original loan we saved HUF 3.4 million. That’s why it’s an obvious amount. If we compare this to the Sberbank credit in the middle of the list, we can keep even more. Here it stands at 26,513,377 forints versus 19,344,000 forints. You see, here you are 7.1-7.2 million HUF the better you are.
But the biggest hit is coming now
There is such a big difference between the calculator’s most recent loan (the interest period is much higher here) and the loan prepayment solution we have described, which we are afraid to describe. J 32,636,620 – 19,344,000 = $ 17,929,620. It costs almost twice as much.
It is important to clarify that the purpose of this tutorial was to show you the benefits of early repayment. And how important the credit calculator used it. If you are convinced by the numbers, contact us! We, too, will find the ideal solution for you.