Velocity Banking vs The Method

Eric Jadlaoui Posted on September 18, 2020• 5 min read

From my point of view it represents the same thing (Velocity Banking vs The method), being small optimizations that can be done by anyone. The purpose is to reduce the total payment amount of a mortgage / real estate bank loan.

Basically, with the help of a sum of money offered by the bank, you will make an advance payment at the beginning of the bank loan, reducing the number of months and a large part of the interest that had to be paid to the bank. Thus, you will use the bank's money to "jump" a few payment steps from the loan.

The method only works if you are a person who manages to have savings at the end of the month. If you are the kind of person who spends all your money, you should not try!

Also, the method is ideal for bank loans at the beginning of the period, because then there is a much higher interest rate and a significant exemption can be achieved.

I will detail a practical case from which I hope you understand as much as possible. Therefore, it will not only be a theoretical explanation of Velocity Banking, but also a concrete situation from one's own experience.

I want you to know that I am not writing to you from the position of a bank loan expert, but from a person who has been informed and tested.

In order to implement "Velocity Banking" we need a real estate, a mortgage / real estate bank loan, an overdraft (overdraft), a shopping card and some savings.

When it comes to mortgage or real estate, it's important to know (and most likely know) the following: It consists of principal and interest (in many cases and commissions and insurance rate). It is a good thing if you use it for an investment. The longer it lasts, the higher the interest and, implicitly, the amount of money to be paid to the bank. In the first part of the loan process, the rate consists of a higher interest rate. Advance payments may reduce the amount of the installment or period (shortening the period means paying the principal in advance and reducing the total amount of payment).

Overdraft is a consumer loan with a slightly higher interest rate. But the advantage is that the interest is calculated only for the days when you do not have money in the account and only for the missing amount. If you do not use the money, you have 0% interest.