In fact, the interest calculation method of all loan products on the market is the same, but the final interest calculation is different according to different repayment methods.
1. Interest before capital
Pay interest first, then interest, and then repay the principal according to the repayment agreement. The specific calculation method is: loan amount × interest rate × years. Its interest rate is monthly, so the loan term is calculated monthly.
2. Equal principal and interest
Matching principal and interest is a loan that pays the same amount every month during the repayment period. The calculation formula is [loan amount × monthly interest rate ×( 1+ monthly interest rate) repayment months ]≤[( 1+ monthly interest rate) repayment months-1], and the interest rate is monthly interest rate.
3. One-time repayment of principal and interest
One-time repayment of principal and interest means that the borrower does not repay the principal and interest on a monthly basis during the loan period, but repays the principal and interest once the loan expires. Its calculation formula is: loan amount × interest rate × years. This is different from the interest before the principal. The interest rate is the annual interest rate and the loan term is calculated on an annual basis.
4. Average capital
During the repayment period, the average capital divides the total loan into equal parts, and repays the same amount of principal and the interest generated by the remaining loans in that month every month. The calculation formula is: (loan amount-paid amount) × loan interest rate. The interest rate corresponds to the monthly interest rate.
Equal principal and interest repayment method: that is, the sum of loan principal and interest is repaid in equal amount every month. Most banks have adopted this method for housing provident fund loans and commercial personal housing loans. So the monthly repayment amount is the same.
Average capital repayment method: that is, the borrower repays the loan in every installment (month) during the whole repayment period, and at the same time pays off the loan interest from the previous trading day to the repayment date. In this way, the monthly repayment amount decreases month by month.
Pay interest on a monthly basis, and repay the principal at maturity: that is, the borrower repays the loan principal in one lump sum on the loan maturity date (applicable to loans with a term of less than one year (including one year)), and the loan bears interest on a daily basis, and the interest is repaid on a monthly basis.
Repay part of the loan in advance: that is, the borrower can repay part of the loan amount in advance when applying to the bank. The general amount is an integer multiple of 10000 or 10000. After repayment, the lending bank will issue a new repayment plan, and the repayment amount and repayment period will change, but the repayment method will remain unchanged, and the new repayment period shall not exceed the original loan period.
Repay all the loans in advance: that is, the borrower can repay all the loan amount in advance when applying to the bank. After repayment, the lending bank will terminate the borrower's loan and handle the corresponding cancellation procedures.
Borrow and pay back: interest is calculated daily after borrowing, and interest is calculated daily. You can pay the money in one lump sum at any time without any penalty.
legal ground
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases
Article 25 If the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except that the interest rate agreed by both parties exceeds four times the market quotation of one-year loan at the time of the establishment of the contract.
The "one-year loan market quotation" mentioned in the preceding paragraph refers to the one-year loan market quotation issued monthly by the National Interbank Funding Center authorized by the People's Bank of China from August 20th, 20th, 20th19th.
Article 26. The loan amount specified in debt certificates such as IOUs, receipts and IOUs is generally recognized as the principal. If interest is deducted from the principal in advance, the people's court shall confirm the actual amount lent as the principal.
Article 27 After the borrower and the borrower settle the loan principal and interest in the early stage, the interest shall be included in the loan principal in the later stage, and the creditor's rights certificate shall be reissued. If the interest rate in the early stage does not exceed four times the market quotation of the one-year loan when the contract is established, the amount specified in the reissued creditor's rights certificate can be confirmed as the loan principal in the later stage. The overcharged interest shall not be used as the loan principal in the future.
According to the calculation in the preceding paragraph, if the sum of the principal and interest that the borrower should pay after the expiration of the loan term exceeds the sum of the interest of the whole loan term based on the initial loan principal and calculated according to the market quotation of the one-year loan at the time of the establishment of the contract, the people's court will not support it.