1, the calculation method is different:

Matching principal and interest means that the total amount returned every month is the same, that is, the value of principal plus interest is equal; The average capital refers to the monthly repayment of average capital, and the interest is decreasing.

2, bear different interest:

Compound interest is used to match the principal and interest, so you have to pay more interest than the average capital.

3. Different interest rates:

Calculate the loan with equal principal and interest by compound interest;

The average capital loan uses a simple interest rate method to calculate interest.

4, suitable for different people:

The monthly repayment of equal principal and interest is relatively fixed, and the amount is neither too much nor too little, which is suitable for borrowers with relatively low income; The average capital is more suitable for people whose careers are in full swing or close to retirement.

5. Different advances:

At the beginning of matching principal and interest, the monthly repayment amount is small and the interest is not conducive to early repayment. General capital generally needs to pay less interest, but the early pressure is relatively large. However, the money to be repaid in the future is getting less and less, and it is also cost-effective to repay in advance.

Extended data

Calculation method of equal principal and interest:

Monthly repayment amount = [principal x monthly interest rate x( 1+ monthly interest rate) loan months ]/[( 1+ monthly interest rate) repayment months-1]

Monthly interest = residual principal x monthly loan interest rate

Total repayment interest = loan amount * loan months * monthly interest rate *( 1+ monthly interest rate) loan months /( 1+ monthly interest rate) repayment months-1- loan amount.

Total repayment amount = repayment months * loan amount * monthly interest rate *( 1+ monthly interest rate) loan months /( 1+ monthly interest rate) repayment months-1.

Baidu Encyclopedia-Equal principal and interest

Reference source: Baidu Encyclopedia-Average Capital