Average capital repayment method is a very simple and practical repayment method. The principle of the basic algorithm is to repay the loan principal in equal amount on schedule during the repayment period, and at the same time pay off the interest generated by the unpaid principal in the current period. Repayment methods can be monthly repayment and quarterly repayment. Due to the requirement of bank interest settlement practice, quarterly repayment is generally adopted (such as China Bank).
The average capital repayment method refers to a repayment method in which the total loan amount is divided into equal parts during the repayment period, and the same amount of principal and interest generated by the remaining loans in the current month are repaid every month. In this way, because the monthly repayment amount is fixed and the interest is less and less, the lender is under great pressure to repay at first, but with the passage of time, the monthly repayment amount is less and less. It is also convenient to determine the repayment ability according to your own income. The total expenditure of this repayment mode may be reduced relative to the matching principal and interest, but the repayment pressure is greater at first. If it is used for mortgage, this method is more suitable for people who are at the peak of work or are about to retire.
superiority
The advantage of the average capital repayment method is that with the increase of repayment times, the repayment pressure will weaken day by day. Under the same loan amount, interest rate and loan life, the total interest of the average capital repayment method is less than that of the equal principal and interest repayment method. The calculation formula of bank interest is: interest = amount of funds × interest rate × occupied time. Because the monthly repayment of the principal is fixed, the monthly loan interest decreases month by month with the decrease of the principal balance, so the average capital repayment method has a large monthly repayment amount at the initial stage of the loan, and then decreases month by month (monthly repayment amount = monthly repayment of the principal × monthly interest rate). For example, the same provident fund loan is 654.38 million yuan, 15 years, and the monthly repayment amount of the equal principal and interest repayment method is 760.40 yuan, while the first month repayment amount of the average capital repayment method is 923.06 yuan (a decrease of 2.04 yuan per month), which is higher than the former 163.34 yuan. Because the latter repaid part of the loan principal in advance, it actually reduced the occupation, shortened the money occupied by the bank and generally reduced the loan interest (* * * 10 was 36 yuan13.55 yuan).
The basic algorithm principle of the average capital repayment method is to repay the loan principal in equal amount on schedule within the repayment period, and at the same time pay off the interest generated by the unpaid principal in the current period. Repayment methods can be monthly repayment and quarterly repayment. Due to the requirement of bank interest settlement practice, quarterly repayment is generally adopted.
computing formula
The calculation formula of the average capital repayment method is as follows:
Quarterly repayment amount = loan principal ÷ number of quarters of loan term+(principal-accumulated repaid principal) × quarterly interest rate.
For example, take the loan of 200,000 yuan and the loan term of 10 year as an example:
Repay the principal in equal amount every quarter: 200,000 ÷ (10× 4) = 5,000 yuan.
Interest in the first quarter: 200,000× (5.58% ÷ 4) = 2,790 yuan.
The repayment amount in the first quarter is 5000+2790=7790 yuan;
Interest in the second quarter: (200,000-5,000×1)× (5.58% ÷ 4) = 2,720 yuan.
The repayment amount in the second quarter is 5000+2720=7720 yuan.
……
Interest in the 40th quarter: (200,000-5,000× 39 )× (5.58% ÷ 4) = 69.75 yuan.
Then the repayment amount in the 40th quarter (the last period) is 5000+69.75=5069.75 yuan.
It can be seen that with the continuous repayment of the principal, the interest on the unpaid principal in the later period is less and less, and the repayment amount in each quarter is gradually reduced. This method is more suitable for borrowers who already have some savings, but their expected income may gradually decrease, such as middle-aged and elderly workers' families, who have some savings, but their retirement income will decrease in the future.
This method was introduced in June 1999 1 and is being gradually adopted by banks.
determining factor
If you deposit money in the bank every day, you will get a day's interest. The more money you save, the more interest you will get. Similarly, the same is true for loans. If the bank loan exceeds one day, it will pay interest for one more day. The larger the loan amount, the more interest will be paid to the bank.
The calculation formula of bank interest is: interest = amount of funds × interest rate × occupied time.
Therefore, the amount of interest, under the condition of constant interest rate, can only be determined by the time and amount of funds actually occupied, but not by which repayment method. This is the unchangeable truth!
Different repayment methods are only set to meet the different needs or consumption preferences of people with different incomes, different ages and different consumption concepts. Its essence is nothing more than "chop and change" or "chop and change" to repay the loan principal first, which leads to the long-term use of the loan principal and short-term use, and then affects the increase and decrease of interest with the change of the actual amount of funds occupied and the length of the term.
It can be seen that no matter which repayment method is adopted, banks do not do business at a loss, and customers do not have the benefit of saving interest expenses.
system of selection
Although the repayment method of average capital has been heated up, many citizens still don't know which repayment method they are suitable for. Judging from the calculation results, the average capital repayment method must pay less interest than the matching principal and interest repayment method, and both repayment methods calculate the corresponding proportion of interest in advance according to how much principal they occupy, and there is not much difference between them. Comparing the two repayment methods, in a sense, the average capital method (decreasing method) is not necessarily better than the matching principal and interest method (matching method), and the choice of repayment method will vary from person to person. "Matching principal and interest repayment method" means that the borrower always repays the loan principal and interest with the same amount every month. At the beginning of repayment, the interest expense is the largest and the principal is still less. In the future, with the gradual reduction of monthly interest expenses, the repayment of principal will gradually increase; The "average capital repayment method" (diminishing method) means that the borrower repays the same amount of loan principal every month, and the interest decreases with the principal every month, and the monthly repayment amount also decreases month by month.
Repayment comparison table
Comparison Table of Matching Principal and Interest and Matching Principal Repayment (Take the loan of 6,543.8+0,000 yuan as an example, the interest rate of 654.38+0 month is 3.45‰)
Both repayment methods reduce the residual principal month by month, and the interest will also decrease month by month, which are calculated according to the time value of the funds occupied by the customer in the management center. Because the "average capital repayment method" returns more loan principal than the "equal principal and interest repayment method" in the same period, the base for calculating loan interest in subsequent periods becomes smaller, and the total amount of interest returned is relatively small. For example, Party A and Party B applied for a personal housing provident fund loan of 654.38+million yuan with a term of 654.38+00 years, and the contract came into effect on June 20, 2005. A chooses the repayment method of equal principal and interest, and B chooses the repayment method of average capital. If the adjustment factor of national interest rate is not considered, the monthly repayment amount of A is the same, which is 1032.05 yuan. Upon maturity, * * * shall pay the principal and interest 123846 yuan. B The repayment amount in the first month is 65,438+0,200.83 yuan, which will decrease month by month with the decrease of the balance at the end of each month. The repayment amount in the last month is 836.40 yuan, and after the maturity, * * needs to pay the principal and interest 122233.90 yuan (Note: when calculating the repayment amount of B, it is assumed that it is 30 days per month, and the actual repayment is calculated based on the actual number of days per month). Therefore, under the same loan amount, interest rate and loan period, the total interest of the "average capital repayment method" is less than that of the "equal principal and interest repayment method". Taking the loan of 65,438+65,438+00 as an example, B pays 65,438+06 yuan less interest than A, 12.65438 yuan.
What suits you is the best.
What kind of repayment method should be adopted? Experts suggest that it should be decided according to the actual situation of the individual. "Equal principal and interest repayment method" has the same repayment amount every month. For young people who have just worked, it is better to choose the "equal principal and interest repayment method", which can reduce the repayment pressure in the early stage. For middle-aged people who already have economic strength, the effect of "average capital repayment method" is ideal. Paying more at the peak of income can reduce the pressure of repayment in the future and reduce interest expenses by prepayment. In addition, the equal principal and interest repayment method is relatively simple to operate, and the monthly amount is fixed and does not need to be calculated. In short, the repayment method of equal principal and interest is suitable for borrowers with low current income, small burden group and steady growth of expected income, such as some young people. The repayment method of average capital is suitable for borrowers with certain savings but increasing family burden, such as middle-aged and elderly people.