The debts or credits on this blog are very much written, but we have not really touched on how to repay these debts, and why a faster loan repayment is a good thing? Just as there are different types of credit, there are different types of loan repayments, and they differ in terms of the amount of credit taken and the length of time that the loan is repaid. Such a difference is self-evident, because a loan that has to be repaid after 30 days cannot be compared to a remainder of 15 years and, ultimately, a loan of € 100 is not comparable to a loan of € 10,000.
Loan Repayment models
Loan repayments are mostly two types of loan repayment models if you have multiple loans called avalanche and mountain climbing models:
Repayment of the Laval Model
Repayment of project or Ipo-ipo Credits means that if you have several loans, you will first repay those credits that are smaller and then get on loans that are larger, thus reducing your total credit and creating sense of progress. This loan repayment model is most advantageous because small loans usually have a high interest rate and therefore when you repay these loans you both see the progress and repay the loan that is the most disadvantageous, because a loan with higher interest payments in the long run will cost you much more than it does with lower interest payments.
The mountain climbing model, in turn, is the type of credit repayment you start with with the biggest loans, and repay them slowly, so that after each of these loans you only have to make smaller loans. This model is not particularly effective and it is usually more difficult for people to stick to it, because repaying large loans usually takes much longer than repaying small loans and is not really a visible progress, but there are individuals who then seem to be paying it is much easier to get involved with less important loans.
One loan repayment can also take place in a number of ways
Regardless of loan repayment models, when you have multiple loans, one loan repayment can also take place in a number of ways where one person may find it easier to pay the loan gradually and with the smallest loan payments each month, but for others it is easier to pay as much money as possible each month and so say hang up to get rid of this debt as soon as possible. Everybody is different from us and so these repayment models are different because another person does not think about these credits, where it is the only thing he can think of, and therefore everyone has to find exactly the model that is most suitable for him.