Which Loan is Best for this Dentist?

Need some advice on which to pick. Might come down to a personal preference?

OPTION 1

Amortization Period: 120 Months
Fixed Rate: 6.40%
No Prepay penalty after 1st year

4 Payments of $0.00
8 Payments of $1,412.58
12 Payments of $2,825.17
12 Payments of $4,237.75 12
84 Payments of $5,650.34 

 OPTION 2

Amortization Period: 120 Months
Fixed Rate: 6.10%
Prepay penalty of 1% of original balance if paid off before the 5 year mark

4 Payments of $0.00 4
8 Payments of $1,390.12
12 Payments of $2,780.24
12 Payments of $4,170.36
84 Payments of $5,560.48

In my opinion, you should go with Option 1 – the 5 year pre-payment penalty outweighs 3/10ths of a point. 

This first appeared on Dentaltown. 

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