The monthly repayment amount in the average capital is different, showing a state of decreasing month by month. Equal principal and interest is the same monthly repayment amount. In essence, the proportion of principal increases month by month, the proportion of interest decreases month by month, and the number of monthly repayments remains unchanged.
The difference between the two:
1. The monthly repayment amount is different: the monthly repayment amount in the average capital is decreasing. The repayment of average capital will be fixed at the same principal amount every month, while the interest amount will decrease with each month. Matching principal and interest means paying the same amount every month, and interest accounts for a large proportion of prepayment.
2. The interest generated is different: the total interest of the average capital repayment method is less than that of the average capital repayment method. For example, the loan is 500,000 yuan, the loan term is one year, and the annual interest rate of the loan is 4.35%. The total interest of equal principal repayment is 2356.25 yuan, and the total interest of equal principal repayment is 237 1.88 yuan.
3. Suitable for different people: General capital is suitable for people with higher income in the early stage and lower income in the later stage. The principal and interest of key old limbs are suitable for people with fixed monthly income.
4. The advantages and disadvantages are different: the advantage of general funds is that they can save more interest, which is conducive to early repayment, but the disadvantage is that the pressure of early repayment is great. The advantage of matching principal and interest is that the monthly repayment pressure is small, and the disadvantage is that you need to pay more interest, which is not conducive to early repayment.