The average capital repayment method means that the lender pays the same amount of principal and fixed interest in each repayment period, and the amount of principal paid in each period is the same, but the interest in each period will gradually decrease.
The advantage of this repayment method is that the amount paid in each installment is easy to plan, which can make the lender better grasp the ability to pay, but its disadvantages are also obvious. Because the interest paid in each installment is reduced, the final repayment period and the total repayment amount are still fixed, so when the repayment period is longer, the overall repayment amount will be more.
Another advantage of average capital's repayment method is that the proportion of the principal paid during the loan period to the current repayment amount gradually increases with the increase of installment times. All lenders can save some interest during the payment period, and lenders can realize repayment faster and more efficiently.