1, equal principal and interest repayment method, that is, the borrower repays the loan principal and interest in equal amount every month, in which the monthly loan interest is calculated according to the actual remaining loan principal and settled every month.
Because the monthly repayment amount is equal, in the initial monthly repayment of the loan, after excluding the monthly settlement interest, the loan principal is less; In the later stage of the loan, due to the continuous reduction of the loan principal, the loan interest is continuously reduced in the monthly repayment amount, and the monthly repayment of the loan principal is more.
2. The average capital repayment method, because the monthly repayment of the principal is fixed, the monthly loan interest decreases month by month with the decrease of the principal balance. Therefore, the average capital repayment method has a large monthly repayment amount at the initial stage of the loan, and then decreases month by month, which has a great pressure on average capital's early repayment.
The difference between the two:
1, the total interest is different: with the same term and loan amount, the interest of equal principal and interest is much higher than the average capital;
2. Different repayment pressures: in the average capital, the monthly repayment amount in the early stage is relatively large, and the repayment amount in the later stage is getting less and less, so the repayment pressure in the early stage is large, and the repayment pressure in the later stage is small. Equal principal and interest every month, moderate pressure;
3. The cost of prepayment is different: the average capital pays more principal in the early stage, but pays more interest on the same principal and interest in the early stage. Therefore, if prepayment is considered, the shorter the loan time, the more cost-effective the average capital will be than the equal principal and interest.
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Tips: The calculation results are for reference only, subject to the actual interest rate of the banking system.
Response time: 2021-11-16. Please refer to the latest business changes announced by Ping An Bank in official website.