Advantages and disadvantages of equal principal and interest repayment
Advantages: convenient and less repayment pressure. The monthly repayment amount is equal, which is convenient for buyers to calculate and arrange the capital expenditure of each period. Because the repayment amount is equally divided and the repayment pressure is equally divided, it is especially suitable for people with low previous income, great economic pressure and heavy monthly repayment burden.
Disadvantages: the total interest expense is high. In the repayment amount of each installment, the interest in the early period accounts for a relatively large proportion, and the proportion of principal repayment in the later period gradually increases. Generally speaking, the total interest expense is the highest among all repayment methods.
Advantages and disadvantages of average capital's repayment law
Advantages: With the reduction of repayment period, average capital's repayment will also be reduced, and the later interest will be less and less, and the repayment burden will be reduced month by month. In the case of the same loan amount and loan life, compared with the repayment method of equal principal and interest, if you choose the right time to repay in advance, you have already repaid a lot of principal in the early stage, and with the decrease of principal in the later stage, you can save a lot of interest expenses.
Disadvantages: Equal principal repayment method is more suitable for buyers with high income and strong repayment ability. This must be decided according to their actual economic situation and cannot be forced, otherwise it may be difficult to bear such a great repayment pressure in the early stage.
What is the difference between equal principal and interest and average capital?
1, suitable for different people.
For different buyers, the repayment method is different. If the family income is relatively stable, you can choose the repayment method of equal principal and interest when buying a house with a loan. Matching principal and interest, especially suitable for young people. With the increase of on-the-job experience, young people have greater opportunities for promotion and salary increase. Matching principal and interest can relieve the pressure of loans and improve the quality of life.
However, if property buyers choose average capital, the financial pressure in the early stage will be very great, and the repayment method in average capital is more suitable for individuals or families with certain economic ability, so that such individuals or families can easily afford the early repayment in average capital.
2. Different interest rates
Matching principal and interest repayment and matching principal repayment are not only suitable for different groups of people, but also for buyers, the interest paid by choosing different repayment methods is different. The interest paid by equal principal and interest is more than the average capital. The longer the loan term, the greater the interest gap. The repayment amount of equal principal and interest is the same every month, while the repayment amount in the average capital is relatively large in the first month, and then decreases month by month. The less you pay, the less the total interest is.