1, it is more cost-effective to pay off the equal amount of principal and interest in the seventh year after 20 years, because the equal amount of principal and interest is calculated according to the way of decreasing interest, so the early repayment is mainly to pay interest, but after the peak, the subsequent interest needs to be paid back less, so paying off in advance can save low cost and is not cost-effective.

2. If the user wants to calculate the optimal period of early settlement, it can be estimated according to 1/3 of the loan application period. For example, if the loan is 30 years, it should be paid off within the first 10 year. At the same time, the cost of early settlement of liquidated damages needs to be included in the cost.

1. Equal principal and interest

1. Equal principal and interest repayment method, also known as regular interest payment method, refers to the borrower's equal repayment of loan principal and interest every month, in which the monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled monthly. Add up the total principal and interest of the mortgage loan and distribute it evenly to each month of the repayment period. As a repayment, he pays a fixed amount to the bank every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.

Second, the average capital

Average capital refers to a repayment method of loans. During the repayment period, the total amount of loans is divided into equal parts, and the same amount of principal and interest generated by the remaining loans of the month are repaid every month. In this way, because the monthly repayment amount is fixed and the interest is less and less, the borrower is under great pressure to repay at first, but as time goes on, the monthly repayment amount is less and less.

Third, the difference between equal principal and interest and average capital.

1, the equal principal and interest repayment method and average capital repayment method, the total amount of interest paid is different.

Under the same loan amount, interest rate and term, the interest of "average capital repayment method" is less than that of "equal principal and interest repayment method". When the general capital loan method starts to repay, the monthly repayment amount will be higher than the amount of equal principal and interest, which is very stressful.

2. Matching principal and interest repayment method Although the repayment amount is large, the funds also have time value. Less repayment in the early stage can be used in other investment and wealth management places, and choosing the repayment method of equal principal and interest is helpful for borrowers to arrange their monthly income and expenditure reasonably.

3. The total repayment amount of average capital repayment method is less than the equal principal and interest. Because the average capital repayment method has a large repayment amount in the initial repayment, it shortens the utilization time of funds, so the interest is less.

Generally speaking, the two repayment methods of equal principal and interest and average capital have their own advantages and disadvantages. Which repayment method to choose depends on your own economic strength and economic situation at that time, and then choose the appropriate repayment method according to your actual situation.