What exactly does average capital mean?
Interpretation: average capital repayment method is to repay the loan principal in equal amount every month, and the loan interest decreases with the principal month by month. That is, the principal is allocated to each month, and the interest between the last repayment date and the current repayment date is paid off.
Characteristics: With the passage of time, the repayment burden will be gradually reduced, and the pressure in the early stage of repayment is greater. The advantage of this repayment method is that it can save more interest than the interest paid in advance with equal principal and interest. The disadvantage is that the pressure of prepayment is great.
Applicable people: people with higher income.
What exactly does equal principal and interest mean?
Interpretation: Matching principal and interest repayment method refers to the equal repayment of loan principal and interest every month during the loan period, that is, the total amount of mortgage principal and the total amount of interest principal are added and evenly distributed to each month of the repayment period. At present, many people choose this repayment method.
Features: In the monthly repayment amount, the proportion of principal increases month by month, while the proportion of interest decreases month by month.
Applicable people: it is more suitable for families with relatively stable income, who buy a house and live by themselves, and the economic conditions do not allow excessive investment in the early stage, such as civil servants, teachers and other people with stable income.
In short, these two repayment methods are that the average capital can save more interest than the equal principal and interest, but the financial ability of the lender is higher; Matching principal and interest is more suitable for ordinary buyers, and the total amount of interest paid is also more.