Quote Originally Posted by Cool Bear View Post
Yes, I would prefer the loan to run its full term too....
A lot of people are confused with the probability of getting 4 heads in a row (which is before the very first toss) vs the probability of each toss which is always 50:50.
The way I see it is with early repayments means you have to to get those four heads in a row, rather than just getting one head.

With the coin toss analogy....I agree the chance of a head/tail is unaffected by the previous results. So if you are given 5 minutes to flip coins and you lose if you get just one 'tail", then If you do five flips, then you have five times the probability of getting a "tail" than if you had just one flip.

So with your $25 invested in harmoney for five years, if you have four early repayments and reinvest the money four times in notes of the same grade with the same default rate, then you will have had five chances of striking a defaulter within the five year period.