The repayment methods of personal loans of banks include equal principal and interest repayment method, average capital repayment method, interest priority method, equal ratio progressive repayment method, equal ratio progressive repayment method and combination repayment method. The familiar repayment methods should be equal principal and interest and average capital, while other methods are rare. Let's look at them first.
1. Equal principal and interest repayment method: i.e. equal repayment of loan principal and interest every month during the loan period.
The calculation formula is: monthly repayment amount = monthly interest rate ×( 1+ monthly interest rate) number of repayment periods /( 1+ monthly interest rate) number of repayment periods-1X loan principal;
In case of prepayment due to interest rate adjustment, the repayment amount of each installment shall be calculated according to the adjustment formula of outstanding loan balance and remaining repayment periods.
2. Average capital repayment method: refers to equal repayment of the loan principal every month during the loan period, and the loan interest decreases with the principal month by month. It is characterized by regular and fixed repayment of principal and monthly payment, and the monthly loan balance is reduced.
The calculation formula is: monthly repayment amount = loan principal/repayment period+(loan principal-accumulated repayment amount of loan principal) × monthly interest rate.
3. This method (also known as the final settlement method) means that the borrower pays off the loan principal and interest on the loan maturity date and repays the interest every month. Generally applicable to loans with a term of 1 year (inclusive).
4. Equal-ratio progressive repayment method: the borrower repays the loan with a certain proportion of progressive amount (installment amount) in each time period, in which the amount returned in each time period includes the interest and principal due in that time period, and repays it in installments according to the repayment interval, and pays off all the principal and interest before the loan deadline. Usually, the proportion of installment repayment is controlled between 0 and (+/- 100)%, and the principal or interest calculated in any installment repayment plan shall not be less than zero.
Equal-ratio progressive repayment method can be divided into equal-ratio incremental repayment method and equal-ratio decreasing repayment method, and the former can be selected in the case of expected future income increase to reduce the trouble of early repayment; In anticipation of future income decline, you can choose the latter to reduce interest expenses.
5. Equal progressive repayment method: It is similar to the equal progressive repayment method, except that the agreed repayment "fixed proportion" in each time period is changed to "fixed amount". Divided into equal increasing repayment method and equal decreasing repayment method: customers with increased income can take measures such as increasing progressive amount and shortening interval to reduce interest burden; Customers with declining income levels can take measures such as reducing the progressive amount and expanding the progressive range to reduce the repayment pressure.
6. Combination repayment method: it is a repayment method that repays the loan principal in installments and calculates the interest according to the actual occupation time of funds. That is, according to the borrower's future income and expenditure, all the loan principal is divided into several repayment stages in proportion, and then the repayment period of each stage is determined. During the repayment period, it is agreed that the monthly repayment amount of the principal to be repaid in each installment shall be calculated in the form of equal principal and interest within the specified period, and the unpaid principal shall bear interest on a monthly basis, and the sum of the two parts forms the monthly repayment amount.
So how to choose the appropriate repayment method? In fact, which repayment method is more cost-effective depends on the borrower's income and repayment ability. If the income is relatively stable, but not too high, you can choose to repay the principal and interest with the same amount; If the repayment ability is strong, you can choose to repay the principal in equal amount.
In addition, it is worth noting that when we apply for commercial loans, banks generally don't take the initiative to ask us which repayment method to choose. If the borrower does not take the initiative to change the repayment method, the bank generally defaults to the repayment method of equal principal and interest of commercial loans. Therefore, when signing a loan contract, you must carefully read the terms of the contract and choose the repayment method that suits you, because once a loan contract is signed, it cannot be changed under normal circumstances.
(The above answers were published on 20 15- 10-27. Please refer to the actual situation for the current purchase policy. )
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