How to calculate the cheapest loan interest?
Let's tell you how to calculate the cheapest loan interest by repaying the loan.
Generally speaking, loan interest is calculated with compound interest on a monthly basis, and there are two ways to repay by installments, one is equal principal and interest, and the other is average capital.
1, equal principal and interest
Compared with the average capital, the equal principal and interest have more interest on the total repayment, but the repayment amount is the same every month, which can reduce the repayment pressure in the early stage. The interest of this loan interest calculation method is calculated according to the total principal. Although a part of the principal was paid back later, the calculation of interest did not decrease with the decrease of the principal. The calculation formula is as follows:
[loan principal × monthly interest rate ×( 1+ monthly interest rate) repayment months] = [(1+monthly interest rate) repayment months-1]
2. Average capital
Although the repayment method in average capital costs more money in the early stage, the overall interest paid is less than the equal principal and interest. Take mortgage as an example. If it is a house that needs a loan of 200,000 yuan, it will be repaid within 20 years. If the calculation method of average capital is adopted, the interest may be reduced by about 654.38+500,000 yuan.
The repayment method of Average capital is to calculate the interest according to your actual reduced principal, and the monthly repayment amount will be reduced, and the principal in the monthly repayment is the same. The specific calculation formula is as follows:
Monthly repayment amount = (loan principal ÷ repayment months)+(principal-accumulated amount of repaid principal) × monthly interest rate.