Equal principal and interest is good.

Mortgage loans generally adopt the repayment method of equal principal and interest, and most banks also default to this repayment method. Only a few of them use the average capital repayment method, which generally requires customers to actively apply, so banks will use the average capital as the repayment method of mortgage loans.

The reason why banks do this is because if the mortgage is repaid with equal principal and interest, customers need to pay more interest, and banks can charge more interest, which is conducive to income; In addition, if the average capital repayment method is adopted, the early repayment pressure of customers is greater, so the credit conditions of customers are higher, and customers need to have a certain economic foundation and stable economic sources, otherwise the possibility of overdue repayment is greater.

If the customer's economic conditions are poor and it is not suitable for excessive capital investment in the initial stage of mortgage repayment, it is best to choose the repayment method of equal principal and interest. If customers don't want to pay too much interest, they can repay in advance when they have money, which can reduce interest and reduce borrowing costs.

What is the calculation formula of equal principal and interest repayment?

The term of mortgage loan for individual house purchase is generally more than one year, so one of the repayment methods is equal principal and interest repayment, that is, from the second month of using the loan, the loan principal and interest will be repaid in equal amount every month. The calculation formula is as follows:

[Loan principal × monthly interest rate ×( 1 monthly interest rate) repayment months]; [(1 monthly interest rate) repayment months-1]

The following example illustrates the repayment method of equal principal and interest.

Suppose the borrower gets a personal housing loan of 200,000 yuan from the bank, the loan term is 20 years, the annual interest rate is 4.2%, and the principal and interest are repaid every month. According to the above formula, the sum of monthly principal and interest payable is 1233.438+04 yuan.

What is the difference between equal principal and interest and average capital?

Matching principal repayment is to repay the principal in equal amount every month, and then calculate the interest according to the remaining principal. Therefore, at the beginning, due to the large amount of principal, the interest will be paid more, so the initial repayment amount will be more and will be reduced every month. The advantage of this method is that it is more suitable for families with strong repayment ability and reduces the interest expenses caused by large repayment in the early stage.

Matching principal and interest repayment is to repay the same amount of loans (including principal and interest) every month during the repayment period. Because the monthly repayment amount is fixed, it can control the expenditure of family income in a planned way, and it is also convenient for each family to determine its repayment ability according to its own income.

What does "equal repayment of principal and interest" mean in bank loans?

1. Matching principal and interest repayment, also known as regular interest payment, means that the borrower repays the loan principal and interest with the same amount 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 principal and interest of the mortgage loan and distribute it evenly to each month of the repayment period.

2. As the repayment person, the bank pays a fixed amount every month, but the proportion of principal in the monthly repayment amount increases month by month, and the proportion of interest decreases month by month. Matching principal and interest repayment is suitable for families with stable income and economic conditions that do not allow excessive investment in the early stage. You can choose this method, such as civil servants, teachers, bosses and other groups with relatively stable income and job opportunities.

3. Because the monthly repayment amount is equal, in the initial monthly repayment of the loan, the principal of the loan will be less after excluding the interest settled every month; In the later period of loan repayment, due to the continuous reduction of loan principal and loan interest in the monthly repayment amount, more loan principal is repaid every month.

This repayment method actually takes up more bank loans and takes longer. At the same time, it is also convenient for borrowers to arrange their monthly life and financial management reasonably.

Is the loan equal in principal and interest or average capital better?

Relatively speaking, the repayment method in average capital will be more cost-effective than the repayment method of equal principal and interest.

1, the average capital repayment method is to distribute the loan principal evenly to each month within the loan term, and the interest will decrease with the principal month by month. In other words, the borrower has to pay the same loan principal every month, but the interest will decrease over time.

2. The method of matching principal and interest is to distribute the loan principal and interest equally to each month, and the borrower must pay the same principal and interest every month. Generally speaking, the average capital method needs to pay less total interest, while the equal principal and interest method needs to pay more total interest.

Extended data:

1. The advantages and disadvantages of equal principal and interest are different from those of average capital: in the case of the same loan term, amount and interest rate, the monthly repayment amount of average capital is greater than the equal principal and interest at the initial repayment stage. However, according to the whole repayment period, average capital's repayment method will save the expenditure of loan interest.

Second, the advantage of matching principal and interest is that the monthly repayment amount is the same, which is convenient for arranging income and expenditure. Suitable for borrowers whose economic conditions do not allow early repayment and excessive investment, and whose income is relatively stable. The disadvantage is that you need to pay more interest. However, most of the pre-payment is interest, and the proportion of principal will increase after half of the repayment period, which is not suitable for early repayment.

3. The advantage of average capital is that the total interest is less than the equal principal and interest. The repayment amount is decreasing every month, and the later the easier it is. Moreover, due to the large proportion of principal and the small proportion of interest, it is very suitable for prepayment. The disadvantage is that the early repayment pressure is high, which requires a certain economic foundation and can withstand the early repayment pressure.

Four. Matching principal and interest repayment: suitable for groups with stable income.

According to insiders, at present, the most repayment method handled by banks is equal principal and interest repayment. This repayment method is to add up the total principal and interest of the mortgage loan, and then share it equally every month during 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.

The introduction of equal principal and interest of mortgage loans ends here.