Equal principal and interest repayment method: The equal principal and interest repayment method means that the borrower repays the loan principal and interest in equal amounts every month. The interest repayment in the early stage of the loan will have a larger proportion and the principal will have a smaller proportion, and the principal and interest repayment will have a larger proportion in the later period of the loan. The characteristic of the equal principal and interest repayment method is that the principal increases month by month, the interest decreases month by month, and the monthly repayment amount remains unchanged. The equal principal and interest method is the most common personal unsecured small loan repayment method.
Equal installment principal repayment method The equal installment principal repayment method means that the borrower distributes the principal evenly and repays it within each month, and at the same time pays off the period from the previous repayment date to the current repayment date. interest between. Compared with equal principal and interest, this repayment method has a slightly lower total interest payment, but the principal and interest paid in the early stage are larger, and the repayment burden decreases month by month.
Early interest and monthly principal repayment method Early interest and monthly principal repayment is the most common repayment method for large-amount consumer installment loans and credit card installment consumer loans. The borrower pays all the interest in one lump sum (generally called the installment fee) when obtaining the loan, and the principal is amortized and repaid every month.
One-time principal and interest payment method One-time principal and interest payment method is a short-term personal unsecured small loan repayment method. It means that the borrower does not repay the principal and interest monthly during the loan period, but pays the loan when it expires. The principal and interest will be returned in one lump sum. If the loan term is less than one year (including one year), the principal and interest will often be repaid in one lump sum upon maturity, and the interest will be paid off along with the principal. This repayment method is suitable for users whose loans are used for turnover and have difficulty repaying during the turnover process. It should be noted that because borrowers usually lack repayment pressure, they often fail to repay the loan when it is due.
The method of regular interest payment and principal repayment on maturity means that the borrower repays the loan principal in one lump sum on the loan maturity date, and the interest is repaid on schedule. The specific installment method can be negotiated with the bank, such as monthly interest repayment, bimonthly interest repayment, quarterly interest repayment, etc. This repayment method is generally more common for large short-term loans. For loans with a term of more than one year, you can often only choose equal principal and interest or equal principal repayments.
Editor’s note: Based on the above summary of personal unsecured small loan repayment methods, it is recommended that lenders choose according to their own repayment ability, and must be clear that overdue loans are absolutely undesirable.