Matching principal and interest refers to a loan repayment method, that is, repaying the same amount of loans (including principal and interest) every month during the repayment period. The amount of principal and interest is different from that of average capital. Although the monthly repayment amount may be lower than the average capital repayment method at the beginning, the interest paid in the end will be higher than the average capital repayment method commonly used by banks. 1. Compound interest is used to calculate loans with equal principal and interest. At the settlement time of each repayment, the interest generated by the remaining principal will be calculated together with the remaining principal (loan balance), that is to say, the outstanding interest will also be calculated. In foreign countries, it is recognized as a loan method suitable for the interests of lenders. The monthly repayment amount is unchanged, which is essentially that the proportion of principal increases month by month, the proportion of interest decreases month by month, and the number of monthly repayments remains unchanged, that is, in the distribution proportion of monthly principal and interest, the proportion of interest repaid in the first half is large and the proportion of principal is small. After more than half of the repayment period, it gradually turns into a large proportion of principal and a small proportion of interest.

2. The average capital loan uses a simple interest rate method to calculate interest. At the settlement time of each repayment, only the remaining principal is calculated, that is to say, the interest on outstanding loans is not calculated together with the outstanding loan balance, only the principal is calculated. The monthly repayment amount decreases, showing a state of decreasing month by month; It distributes the loan principal evenly according to the total repayment months, plus the interest of the remaining principal in the previous period, thus forming the monthly repayment amount, so the repayment amount in the average capital method is the largest in the first month, and then decreases month by month, and the less the more.

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