What does equal principal and interest repayment mean, it is best to be easy to understand

Equal principal and interest refers to the repayment method of a loan, which refers to the repayment of the same amount of loan (including principal and interest) every month during the repayment period.

Equal principal and interest are not the same as equal principal payments, although the monthly repayment amount may be lower than the amount of equal principal repayment at the beginning of the repayment method, but the final interest repayment will be higher than that of the equal principal repayment method.

That is, the total principal amount and the total interest of the mortgage loan are added and then evenly distributed to each month of the repayment period, and the monthly repayment amount is fixed, but the proportion of principal in the monthly repayment amount increases month by month, and the proportion of interest decreases month by month. This method is the most common and has been recommended by most banks for a long time.

The equal principal repayment method means that the borrower repays the loan principal at the same amount (loan amount and number of loan months) every month, and the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and settled month by month, and the total of the two is the monthly repayment amount.

The equal principal and interest repayment method is to fix the monthly payment amount in advance under the condition that the interest rate remains unchanged, so that it is convenient for you to remember. The equal principal and interest repayment method will pay higher interest than the equal principal repayment method.

Equal repayment of principal and interest is the same as the annual repayment of the principal amount of the loan, and the interest accrued each year is paid in the current year.

Equal repayment of principal and interest means that the "principal + interest" of the loan repaid in each installment is a fixed value.

1. Equal repayment of principal and interest, that is, the principal and interest of the loan repaid every year are the same

Assuming that the loan is 10 million, the annual interest rate is 6%, and the principal and interest are repaid in equal amounts at the end of each year within 5 years, then: the principal and interest of the loan repaid each year and a p (a p,6%,5) 1000 6% (1+6%)5 [(1+6%)5 1].

Interest on the loan repaid in the first year Opening loan balance Loan interest rate 1000 6% 60, then the principal repaid in the first year, the remaining unpaid principal 1000

Interest on the loan repaid in the second year (1000, principal repaid in the second year

And so on. 2. Equal principal repayment interest shall be paid

Suppose you borrow 10 million, the annual interest rate is 6%, and the equal principal repayment interest at the end of each year within 5 years will be paid

Then the principal returned each year is 200, then the interest returned in the first year is 1000 6% 60, the principal returned in the first year is 200, and the remaining 800 principal is not returned.

Interest repaid in the second year 800 6% 48, the principal returned in the second year is 200, and the remaining 600 principal is not returned.

The interest repaid in the third year is 600 6% 36, and the principal repaid in the third year is 200.

And so on. You compare it.

The equal repayment method means that the borrower repays the principal and interest of the loan in equal amounts every month during the loan period (i.e., the monthly repayment amount is the same).

The calculation formula is as follows:

Interest paid monthly Remaining principal x monthly interest rate of the loan;

Monthly Principal Repayment Monthly Principal Payment - Interest paid monthly.

Equal principal and interest: Equal repayment of principal and interest on a monthly basis, with the monthly principal and interest repaid in equal amounts, that is, the money repaid each month is the same, including the principal and interest. For example, the monthly win A on the win-win club is to use the repayment method of equal principal and interest.

Investors can get a return every month, which improves the liquidity of funds, and can "reinvest" and "make money" with the return; It is also convenient for borrowers to reasonably arrange their monthly life and financial management, reduce the pressure on borrowers, and reduce the occurrence of overdue bad debts.

Equal principal and interest refers to a repayment method of a home loan, which is to repay the same amount of loan (including principal and interest) every month during the repayment period.

The monthly repayment amount is calculated as follows:

Loan Principal Monthly Interest Rate (1 Month Interest Rate) Number of Repayment Months 1 Month Interest Rate) Number of Repayment Months 1

As an example, suppose the borrower obtains a personal housing loan of 200,000 yuan from the bank, with a loan term of 20 years, a monthly interest rate, and monthly repayment of principal and interest. According to the above formula, the sum of principal and interest payable per month is yuan.

The above results only give the sum of principal and interest payable for each month, so this sum of principal and interest needs to be decomposed. Based on the above example, one month is one period, and the balance of the first loan is 200,000 yuan, and the interest should be paid (200,000, so only the principal can be repaid, and the bank loan is still owed; The second installment should be paid interest yuan (, return the principal yuan, still owe the bank a stupid loan, and so on.

The disadvantage of this repayment model compared with the equal principal repayment method is that the interest is more expensed, and the interest at the beginning of repayment accounts for most of the monthly contribution, and the proportion of principal in the contribution increases as the principal is gradually returned. However, this method has a fixed monthly repayment amount, which can control the expenditure of household income in a planned way, and also facilitate each family to determine the repayment ability according to their own income. This method is more suitable for borrowers with small current income and expected income to stabilize or increase, or people with a clear budget and stable income, generally young people, especially young people who have just started working, so as to avoid too much repayment pressure at the beginning.

Equal repayment of principal and interest means that the borrower repays the principal and interest of the loan at the same amount every month, in which the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and paid off month by month.

Because the monthly repayment amount is the same, in the monthly repayment of the loan in the early stage of the loan, after removing the loan interest paid on a monthly basis, the loan principal repaid is less, and in the middle and later stages of the loan, due to the continuous reduction of the loan principal and the continuous reduction of the loan interest in the monthly repayment, the monthly loan principal repayment is more. This type of loan repayment method specifically accounts for a large number of loans from financial institutions and occupies a longer period of time, and at the same time, it is also conducive to the borrower's reasonable arrangement of monthly clothing, food, housing and transportation, as well as investment and financial management.

Such as renting a house, etc.), the banquet is undoubtedly the most suitable for people who are skilled in project investment and good at "making money with money".

There are four basic repayment methods with equal principal and interest.

The equal amount of principal, the interest is repaid first and then the principal, and the equal principal and interest are first distributed to the fixed amount of repayment in each installment within the full repayment date, and at the same time, the loan interest (the interest is the loan interest that should be repaid in the middle of the previous repayment date) (the interest is the loan interest that should be repaid), along with the reduction of the principal, the loan interest for each repayment is also reduced, so that the amount of each repayment will be lower and lower until the whole is settled, so it is also called the interest with the principal and the equal principal unequal interest repayment method. The equal principal and interest are calculated from the date of borrowing to the end of the repayment period, and then the total amount is divided into equal parts for each installment. Principal and interest repayment refers to the repayment of the same amount of loan interest every month on the repayment date, and the repayment of the loan interest and all the principal of the month in the last month.

Interest is the fee for the use of money for a certain period of time, and refers to the remuneration received by the holder of the currency (creditor) from the borrower (debtor) for lending money or monetary capital. This includes interest on deposits, loans, and interest on various bonds. in the capitalist system.

The source of interest is the surplus value created by the wage labourers.

The essence of interest is a special form of transformation of surplus value, which is part of the profit.

Equal principal and interest refers to the repayment of the same amount of the loan every month during the repayment period. Equal principal and interest, also known as regular interest, is generally used in home loans, and is different from equal principal in that although the monthly repayment amount may be lower than the amount of the equal principal repayment method at the beginning of the repayment, the final interest repayment will be higher than the equal principal repayment method.

Since the monthly repayment amount is equal, the principal amount of the loan will be less after excluding the interest settled on a monthly basis in the initial monthly repayment of the loan. In the later stage of the loan, due to the continuous reduction of the loan principal and the continuous reduction of the loan interest in the monthly repayment, the monthly repayment of the loan principal is more.

This repayment method actually occupies a larger number of bank loans and occupies a longer period of time, and it is also convenient for borrowers to reasonably arrange their monthly life and financial management, and it is undoubtedly the best choice for those who are proficient in investment and good at "making money with money".

For example, suppose the borrower obtains a personal housing loan of 200,000 yuan from the bank, with a loan term of 20 years, an annual interest rate on the loan, and monthly repayment of principal and interest. According to the above formula, the sum of principal and interest payable per month is yuan.

The equal principal and interest repayment method is a repayment method, that is, the borrower repays the principal and interest of the loan in the same amount every month, but the proportion of the principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month, and the calculation of equal principal and interest repayment is as follows:

Monthly repayment amount = loan principal [monthly interest rate (1 + monthly interest rate) number of months of repayment] .

Equal principal and interest repayment method: The monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and settled month by month. Since the monthly repayments are equal, the principal amount of the loan is less when the monthly interest is excluded from the monthly repayments at the beginning of the loan. This repayment method actually occupies a larger number of bank loans and takes up a longer period of time.

Equal principal and interest is a repayment method after the loan, the monthly repayment amount of this repayment method is the same, at the beginning of the repayment, the interest accounts for the vast majority of the total amount of monthly repayment, with the passage of time, the principal accounts for a relatively large proportion of the monthly repayment in the later period, and the interest is relatively small.

Since the amount of repayment is the same every month, users can reasonably arrange their repayment plan, but compared with other repayment methods, under the premise that the loan conditions are the same, the total interest paid by equal principal and interest will be more, and you must pay attention to this when using this repayment method.

Users can repay in advance after using equal principal and interest repayment, and generally the earlier the time of early repayment, the more interest users will save, after all, the interest accounts for more in the loan repaid in the early stage. If the user repays more than two-thirds of the time, there is no need to repay the principal in advance, and the early repayment of the principal accounts for the most.

The equal amount of principal and interest is suitable for people whose economic income is relatively stable, and their income will not increase significantly in the future, nor will it decrease significantly. In addition to equal principal and interest repayment, the bank also provides equal principal repayment when applying for loans, which has relatively high requirements for the borrower's income.