At present, there are two repayment methods in banking policy: equal principal and interest and average capital.

1. Equal principal and interest is the sum of principal and interest repaid every month.

2. In the average capital, the principal paid every month is constant, and the interest will gradually decrease. Because the total amount owed is decreasing every month, the interest will decrease every month.

If the average capital is suggested to be repaid in advance, the principal of each repayment amount in the average capital repayment method is the same throughout the repayment period, and the repayment interest decreases month by month; The total principal and interest decreases month by month. This repayment method has great pressure on early repayment and is suitable for people with higher income or who want to repay in advance.

Matching principal and interest repayment method: the principal in each repayment amount is different, the prepayment amount is small, and the total monthly principal and interest is equal. This repayment method takes a long time because the repayment speed of the principal is relatively slow and the total interest of repayment is higher than that of the general principal repayment method with the same term.

Therefore, it is suggested that the average capital should be selected for prepayment when the economic capacity allows.