What Are the Pros and Cons of a Balloon Loan?

Balloon loan ^[1] Chinese vocabulary is an image name. This type of loan has a small repayment amount in each period, but the repayment amount on the loan due date is large.

Balloon loan

Balloon loan ^[1]

English: Balloon Loan, is a popular loan method abroad!

"Balloon loan" is a real interest-saving

(New application to the bank for housing

1. Apply to the bank for first-hand housing

1.

What is "balloon loan"? "Balloon loan" is a new home loan product with a new repayment method. The loan interest and part of the principal are repaid in installments, and the remaining principal is repaid once due.

Compared with ordinary repayment methods, what are the characteristics of "balloon loans"? Balloon loan has a small repayment amount in the previous period, and when the loan expires, a larger part of the loan principal needs to be repaid by the borrower at one time.

What is the real benefit to customers when applying for a "balloon loan"? 1. Customers can choose a short-term loan and a low monthly payment at the same time. For example, a "balloon loan" with a three-year term can choose a low monthly payment with a 30-year loan;

2. Customers can have a lower loan interest rate. Since the actual loan term of the "balloon loan" is short, the loan interest rate of the corresponding term is also low. For example, a 3-year "balloon loan" (calculated on a 30-year monthly basis), the applicable benchmark interest rate is 5.4%; if it is a 30-year ordinary housing loan, the applicable benchmark interest rate is 5.94%.

"Balloon loans" have short loan terms and there is a lot of pressure on repayment when the loans are due. If the customer fails to make a one-time payment after maturity, will the loan be overdue? Indeed, at the end of the period, "balloon loans" require borrowers to repay a large amount of the principal and interest of the loan at one time, which puts pressure on repayment. but:

1. The target customers of Balloon Loan are all high-quality customers who have the willingness to repay in advance and the ability to repay in advance. Most of them settle the Balloon Loan on time or in advance;

2. The Bank also provides refinancing arrangements for the remaining principal after the balloon loan expires. As long as the customer's "balloon loan" repays normally, our bank promises to automatically provide in-bank refinancing services when the loan expires. Refund the "balloon loan" by issuing a new loan.

What conditions do customers need to meet to refinance the "balloon loan" when it expires? 1. "Balloon loan" has a good repayment record. It is required that the number of overdue cannot exceed 6 times, and there cannot be two consecutive overdue records; The above overdue records (overdue calculation is not required if the overdue is less than 7 days);

2. The collateral is not sealed, the property rights are clear, the application status is complete, and it is capable of realizing;

3. The borrower has the ability to repay.

Can I continue to choose "balloon loans" for refinanced loans? can. You can choose ordinary mortgage repayment methods, or you can continue to choose balloon loans.

Is the refinancing process cumbersome? For the refinancing of "balloon loans", our bank has set up a simple application approval model. Customers only need to go to the bank: submit their ID cards, fill in application approval forms, and sign related contracts. Generally, there is no need to redeem the building and re-register for mortgage.

Do customers need to pay a fee for refinancing? No new fees.

Which customers can apply for a "balloon loan"? "Balloon loan" is a mortgage product specially designed for high-quality mortgage customers who have the willingness to repay in advance and the ability to repay in advance. The applicant must meet at least the following conditions:

1. The credit history is good, and its historical credit history: the number of overdue times does not exceed 6 times, and there is no accumulated overdue history of 2 or more. Any overdue within 7 days that can be proved can be regarded as no overdue record.

2. Have formal work and stable income sources, and have the ability to repay;

3. The mortgage loan application that he applied for meets the credit requirements of the Bank.

Are all balloon loans available for "balloon loans"? Business types that can be used for "balloon loans" include: personal housing mortgage loans (primary housing mortgage loans, second-hand housing mortgage loans), personal housing non-transaction mortgages, personal housing mortgage loans, and personal business housing mortgage loans.

If the customer is currently taking out a mortgage, can it be transferred to your bank for a "balloon loan"? can. The customer can transfer the mortgage loan from another bank to our bank and then apply for a "balloon loan".

Why do I need to apply for a revolving loan before applying for a "balloon loan"? Will revolving loans increase the cumbersome application process for customers? Revolving loans can facilitate subsequent refinancing. If the borrower needs refinancing after the "balloon loan" expires, it can be issued under a revolving loan line, thereby reducing the cumbersome procedures of canceling the mortgage registration and re-processing the mortgage registration.

To apply for a revolving loan, customers only need to fill in the relevant contract synchronously when applying for a "balloon loan" without additional procedures and fees.

Can I apply for a "balloon loan" if the house cannot handle a revolving loan? For example, a primary off-plan mortgage loan. In principle, we require that "balloon loans" must be issued under revolving loans. For first-hand off-plan mortgage loans, if revolving loans cannot be processed, it is allowed to issue "balloon loans" in the form of single mortgage loans first. However, after issuing the real estate certificate, it was required to switch to the form of revolving loan.