1, the average capital repayment method is to distribute the loan principal evenly to each month during the loan period, and the interest decreases with the principal month by month. In other words, the borrower has to pay back the same loan principal every month, but the interest will decrease over time.
2. The matching principal and interest method is to divide the loan principal and interest equally into each month, and the borrower has to pay the same principal and interest every month. Generally speaking, the average capital method needs to pay less total interest, while the equal principal and interest method needs to pay more total interest.
Extended data:
1. The advantages and disadvantages of equal principal and interest are different from the average capital: in the case of the same loan term, amount and interest rate, the monthly repayment amount of average capital is greater than the equal principal and interest at the initial repayment stage. However, according to the whole repayment period, average capital's repayment method will save the expenditure of loan interest.
Second, the advantage of matching principal and interest is that the monthly repayment amount is the same, which is convenient for arranging income and expenditure. Suitable for borrowers whose economic conditions do not allow early repayment and excessive investment, and whose income is relatively stable. The disadvantage is that you need to pay more interest. However, most of the advance payment is interest, and the proportion of principal will increase after half of the repayment period, which is not suitable for early repayment.
3. The advantage of average capital is that the total interest is less than the equal principal and interest. The repayment amount decreases every month, and the later, the easier it is. Moreover, due to the large proportion of principal and small proportion of interest, it is very suitable for early repayment. The disadvantage is that the pressure of prepayment is great, and it needs to have a certain economic foundation and can withstand the pressure of prepayment.
Four. Matching principal and interest repayment: suitable for groups with stable income.
According to insiders, at present, the most repayment method handled by banks is equal principal and interest repayment. This repayment method is to add up the total principal and interest of the mortgage loan, and then share it equally every month during the repayment period. As a repayment, he pays a fixed amount to the bank every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.
5. Equal principal repayment: suitable for people with higher income at present.
In addition to the equal principal and interest repayment method, average capital repayment method is also a common way of mortgage repayment, and the borrower can gradually reduce the burden with the increase of repayment period. This repayment method distributes the principal to each month and pays off the interest between the last repayment date and the current repayment date.