Average capital is a good choice for repaying loans. Average capital's repayment method divides the total loan into equal parts during the repayment period, and repays the same amount of principal and the interest generated by the remaining loans in the current month every month. In this way, because the monthly repayment amount is fixed and the interest is less and less, the borrower is under great pressure to repay at first, but with the passage of time, the monthly repayment amount is less and less, and the total interest of this repayment method is relatively less, with high cost performance, but the early repayment pressure is greater.

The meaning and calculation formula of average capital

1, meaning: average capital is also called unequal interest repayment in average capital. The lender will allocate the principal to each month and pay off the interest from the previous trading day to the repayment date.

Compared with the matching principal and interest, the total interest cost of this repayment method is lower, but the principal and interest paid in the early stage are more, and the repayment burden is reduced month by month.

2. Calculation formula:

Monthly principal and interest repayment amount = (principal/repayment months)+(principal-accumulated principal repayment) × monthly interest rate;

Monthly principal = total principal/repayment months;

Monthly interest = (principal-accumulated principal repayment) × monthly interest rate;

Total repayment interest = (repayment months+1)* loan amount * monthly interest rate/2;

Total repayment amount = (repayment months+1)* loan amount * monthly interest rate /2+ loan amount.

The meaning and calculation formula of equal principal and interest

1. Meaning: equal principal and interest is also called regular interest payment, that is, the borrower repays the loan principal and interest in equal amount every month, and the monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled every month.

Because the monthly repayment amount is equal, in the initial monthly repayment of the loan, after excluding the monthly settlement interest, the loan principal is less; In the later stage of the loan, due to the continuous reduction of the loan principal, the loan interest is continuously reduced in the monthly repayment amount, and the monthly repayment of the loan principal is more.

2. Calculation formula:

Monthly repayment amount = [principal x monthly interest rate x( 1+ monthly interest rate) loan months ]/[( 1+ monthly interest rate) repayment months-1];

Monthly interest = residual principal x monthly loan interest rate;

Total repayment interest = loan amount * loan months * monthly interest rate *( 1+ monthly interest rate) loan months /( 1+ monthly interest rate) repayment months-1- loan amount;

Total repayment amount = repayment months * loan amount * monthly interest rate *( 1+ monthly interest rate) loan months /( 1+ monthly interest rate) repayment months-1.