2. The total interest is different. For the same loan amount, the total interest generated by average capital is less than the total interest generated by equal principal and interest.
In fact, if you want to know the difference between the two, you only need to understand its concept. Matching principal and interest refers to a repayment method of loans, that is, repaying the same amount of loans (including principal and interest) every month during the repayment period. Average capital 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.
Extended data:
How to choose average capital and equal principal and interest;
In fact, whether it is "equal principal and interest" or "average capital", the interest we pay back to the bank every month is actually calculated according to how much you owe the bank at present and then multiplied by the same interest rate. We need to pay the same monthly interest on the loan.
It's just that the average capital will pay more principal at first, so the total principal owed to the bank will be less and faster, so the total interest will be less; Matching principal and interest means that you pay less money at first, and then increase the principal you want to pay every month, so that the total interest you want to pay in the end will be more than the average capital.
But in fact, there is no difference between the two repayment methods. Everyone has different needs and conditions, so the choice is different. If you don't want to repay so much principal at present, you can choose equal principal and interest. If you think it's okay to pay a little more principal in the early stage and don't want to pay so much interest, you can choose the average capital and don't be too entangled. It is recommended to choose according to your own conditions.
Most friends around me choose equal principal and interest, because most of them have relatively stable wages, the repayment amount corresponding to equal principal and interest is relatively fixed, and the repayment pressure is relatively balanced, which is more suitable for them.
However, no matter which repayment method you choose, the interest paid by provident fund loans is lower than that paid by commercial loans, so if you meet the conditions, try to choose provident fund loans.