Repayment Loan Amount

[WhyME]

Taking Property credit to be finance over 10 years.

Scenario 1
Loan amount granted for R425K but deposit paid of R50K meaning loan amount R375K. Repayment R4900

Scenario 2
Ie. Loan amount granted R425K, repayments R5600, month later payment of R50K made into account.

Does it mean my repayments will now be same as scenario1 R4900 or paying in R50K at later stage will be swallowed up by interest thus not make repayments to be same as Scenario 1?

Thanks

 

[Jehosefat]

In general the repayments will stay as R5600 but the term of the loan will come down (so you'll pay it off in 9 years (approx.) rather than 10).

Although you can usually ask the bank to adjust the repayments down to the R4900 but then the term will still be 10 years.

 

[SauRoNZA]

Depends what you instruct the bank to do.

They can either adjust the repayment based on access bond balance or keep it static based on pre-calculation of capital amount.


I would personally take Option 1 but pay it back with the amount from Option 2 to reduce the loan term and overall interest.

 

[WhyME]

Thanks so much for the feedback.

 

[WhyME]

I will go with Scenario 1 and make extra payments.