What is the difference between equal principal and equal principal and interest? What are the pros a

Equal principal: The monthly principal is the same, and the interest decreases monthly according to the balance of the principal repaid, and the further it goes, the less it becomes.

Equal principal and interest: The monthly repayment is the same, and the interest is higher first and then lower.

Advantages of equal principal: Whether you repay the loan early or continue to pay it monthly, the interest paid on the equal principal will be less, because the interest is calculated according to the principal you owe, and you repay the principal every month, the less interest you will receive.

Disadvantages: There will be more monthly payments at the beginning, and the pressure will be greater, but it will be very easy later.

Advantages of equal principal and interest: the monthly repayment is the same, and the relative pressure is not great.

Disadvantages: Whether you repay in advance or keep repaying, the interest will be higher than the same principal, because it is to collect interest first and then collect the principal, such as you have a loan for 15 years, and repay the loan in advance after two years, you will find that it seems that you have not repaid the money at all, because your monthly payment for the first two years is basically 80% of the interest, if you repay 6-7 years later, the basic 15 years of interest are collected, and it is meaningless for you to repay in advance, because the rest is the principal.

Reminder: The bank will strongly recommend that you do equal principal and interest, he will tell you that the monthly repayment is the same, the pressure is not great, in fact, you want to charge more interest, but I personally recommend that you still use the same amount of principal, because the interest is relatively small, if the pressure is high, you can mortgage for a few more years, and the monthly payment will be less.

Equal principal and interest, in the term of the loan, the monthly payment is the same, in which the principal increases, and the interest decreases, that is to say, the principal is deducted less and the interest is more in the monthly payment of principal and interest in the early period.

The equal principal amount refers to the fact that during the term of the payment, the equal amount remains unchanged and the interest decreases. The upfront repayment pressure is high, and the more you repay, the less you will repay.

Compared with the two repayment methods, with the same amount and the same period, you can pay less interest if you choose the same amount of principal, because the principal part deducted from its monthly payment is more than the equal amount of principal and interest, then, after each repayment, the less principal remains, the less interest.

As for which way to choose, it depends on your economic conditions, if you need to use money in other aspects after the mortgage, then you can choose the same amount of principal and interest with less pressure, and when you have completed all the big things, save some surplus money to the bank to apply for partial early repayment or early settlement of the loan, you only need to repay the remaining principal (some banks will charge a little liquidated damages).

If you are a high-income family, the monthly payment only accounts for a small part of your family's income and expenditure, and you can choose to pay the same amount of principal if you have no financial pressure.

What is the difference between equal principal and interest and equal principal?

Equal principal amountEqual to the principal and interest, which is to spread the loan principal evenly over the monthly repayment, plus interest calculated on the full amount of the instalmentThe monthly repayment of principal and interest is fixed.

The equal principal amount is divided equally among each repayment monthRepay the same principal amount each month plus the interest accrued on the remaining loan amount during that month.

Here are detailed examples that can make the difference:

1. The characteristics of equal principal

The monthly repayment amount is different, showing a state of decreasing month by month; It is to divide the loan principal equally according to the total number of months of repayment, plus the interest on the remaining principal of the previous period, so as to form a monthly repayment, so the equal principal method is the most repaid in one month, and then decreases month by month, and the more you repay, the less you repay.

2. The characteristics of equal principal and interest

The monthly repayment amount is the same, in essence, the proportion of principal increases month by month, the proportion of interest decreases month by month, and the monthly repayment amount remains unchanged, that is, in the distribution ratio of "principal and interest" in the monthly payment, the proportion of interest repaid in the first half of the period is large and the proportion of principal is small, and the proportion of principal is gradually changed to a large proportion of principal and a small proportion of interest after the repayment period is more than half.

The equal principal repayment method is suitable for borrowers who have a certain financial foundation, can bear the greater repayment pressure in the early stage, and have an early repayment plan. The equal principal and interest repayment method is convenient for arranging income and expenditure because the same amount is repaid every monthBorrowers who are suitable for economic conditions do not allow excessive investment in early repayment and whose income is in a relatively stable and hidden state.

1. The concept is different

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 refers to a repayment method of a loan, which is to divide the total amount of the loan into equal parts during the repayment period, and repay the same amount of liquid group principal and the interest generated by the remaining loan in that month every month, so that because the monthly repayment principal amount is fixed, and the interest is getting less and less, the borrower has greater repayment pressure at first, but the monthly repayment amount is also less and less with the passage of time.

2. Different ways of use:

Equal principal and interest are different concepts from equal principal, although the monthly repayment amount may be lower than the amount of equal principal repayment method at the beginning of repayment, but the final interest repayment will be higher than that of equal principal repayment method, which is often used by banks.

What is the difference between equal principal and interest and equal principal?

1. The repayment amount is different. The monthly repayment amount of equal principal and interest is the same, in which the proportion of interest in the monthly repayment ratio decreases month by month, and the proportion of principal increases month by month. The monthly repayment amount of the equal principal decreases month by month, where the principal amount remains unchanged in the proportion of the monthly repayment amount and the interest decreases month by month.

The higher the loan amount and the longer the tenure, the more total interest to be repaid than the same amount of principal and interest.

2. Suitable for different groups of people. Because the monthly repayment amount is the same, the repayment pressure in the early stage is not as large as the equal principal, so it is more suitable for young people who do not have too much savings but have a fixed monthly income. The pressure of repayment in the early stage of the equal principal is high, and the repayment pressure gradually decreases over time.

Therefore, it is more suitable for people who have a good current income and a certain amount of savings. Older people can use the equal principal repayment method, because as they get older or retire, their income may decrease, and the repayment pressure in the later stage of the equal principal repayment method is less and less.

Extended Information: Which is the best value for equal principal or equal principal and interest?

An equal amount of principal is more cost-effective.

The reason for this is that the total interest paid is less, which is the most straightforward way to measure whether it is cost-effective.

For example, the annual interest rate of the same loan, a loan of 100,000 yuan for 10 years, the equal principal and interest = yuan, the equal principal and interest interest = yuan, and the difference is yuan;

Loan of 200,000 yuan for 20 years, equal principal and interest = yuan, equal principal and interest interest = yuan, the difference is yuan;

Loan of 300,000 yuan for 30 years, equal principal and interest = yuan, equal principal and interest interest = yuan, the difference is yuan.

The larger the principal amount of the loan, the longer the loan term, and the more cost-effective the interest savings that can be made with the same principal amount.

The difference between equal principal and equal principal and interest is that the fixed amount of monthly repayment is different.

1. The fixed number of repayment is different

Equal principal repayment: The principal repayment is fixed each month, plus the interest due.

Equal principal and interest repayment: The monthly repayment amount is fixed and includes the interest and principal repayable each month.

2. Suitable for different objects:

Equal Principal: Suitable for planned prepayment.

Equal principal and interest: suitable for repayment according to the actual loan.

3. Different methods of loan repayment:

Equal principal: The principal remains the same, the interest decreases month by month, and the monthly repayment decreases. Compared with the equal principal and interest, the total interest expense is lower, but the principal and interest paid in the previous period are more, and the repayment burden decreases month by month. Shirt bright.

Equal principal and interest: The principal increases month by month, the interest decreases month by month, and the monthly repayment amount remains unchanged. Equal principal and interest, also known as regular interest payment, means that the borrower repays the loan principal and interest in equal amounts every month, in which the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and settled month by month.

Equal principal and equal principal and interest are two different repayment methods in a loan, and the main difference is the difference in monthly repayment amount and total interest, which are calculated according to their respective methods to meet the needs of different groups of people. So, what is the difference between the specific equal principal amount and the equal amount of imitation principal and interest? Let's take a look.

The difference between equal principal and equal principal and interest

1. The repayment characteristics are different

The equal principal amount is the same as the principal repayment in each month, and the monthly interest decreases with the repayment of the principal, so the resulting monthly repayment amount will be different.

Equal principal and interest is to ensure that the monthly repayment amount is equal and the same amount is repaid every month, but the monthly principal repayment is increased from small to large, and the monthly interest payable is decreasing from large to small.

2. The monthly repayment amount and total interest are different

Take a loan of 9,000 yuan, 3 months of repayment, and annual interest rate as an example, the same amount of principal, the first month's repayment = 3,054 yuan, the next month's repayment = 3,036 yuan, the last month's repayment = 3,018, and the total interest = 108 yuan;

Equal principal and interest, monthly repayment = total interest = yuan.

It can be seen that the interest on the equal principal is less than the equal principal and interest, and the larger the loan principal and the longer the loan term, the greater the interest difference between the two will be.

3. Applicable groups of people are different

The same amount of principal is suitable for people who have a higher income in the early stage and want to return a larger amount of principal in the early stage.

Equal principal and interest, suitable for repayment groups with fixed monthly salary income, and the monthly repayment amount is equal, which is convenient for reasonable arrangement of monthly living expenses and financial planning, which is more worry-free.