Advantages and disadvantages of equal principal and equal principal and interest

The difference and benefits of equal principal and equal principal and interest.

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

2. 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.

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Equal principal and equal principal and interest are different repayment methods.

Equal principal amount refers to the equal amount of the loan during the repayment period, with a fixed principal repayment every month, but the decrease in principal repayment at any time will reduce the monthly interest payment.

Equal principal and interest is to split the principal and interest into several parts, and repay the same amount of principal and interest every month.

In the two ways of equal principal and equal principal and interest, the principal repayment is the same, but the interest will be different.

The difference between equal principal and equal principal and interest mainly lies in three aspects: the calculation formula, the monthly repayment amount, and the applicable population

1. There is a difference in the monthly repayment amount.

The equal principal amount is the monthly repayment amount, which is decreasing month by month; It is to divide the loan principal evenly 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 repayment amount of the equal principal method is more than the month, and then decreases month by month, and the more you repay, the less you repay.

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 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.

2. Suitable for different people.

The equal principal method is more suitable for lenders with strong repayment ability in the previous period because the repayment amount is larger in the early stage and then decreases month by month.

The monthly repayment amount of equal principal and interest is the same, so it is more suitable for families with normal spending plans, especially young people, and as they get older or move up their positions, their income will increase, and their living standards will naturally rise. If such people choose the principal method, the initial pressure will be very high.

3. The calculation formula is different.

Equal principal and interest method:

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

Monthly Interest = Remaining Principal x Monthly Interest Rate on the Loan.

Total interest on repayment = loan amount * number of months of loan * monthly interest rate * (1 + monthly interest rate) number of months of loan [(1 + monthly interest rate) number of months of repayment - 1] - loan amount.

Total repayment amount = number of repayment months * loan amount * monthly interest rate * (1 + monthly interest rate) number of loan months [(1 + monthly interest rate) number of repayment months - 1].

Equal Principal Method:

Monthly principal and interest repayment amount = (principal number of repayment months) + (principal - accumulated principal repaid) monthly interest rate.

Monthly Principal = Total Principal Number of months of repayment.

Monthly Interest = (Principal - Accumulated Principal Repaid) Monthly Interest Rate.

Total interest on repayment = (number of months of repayment + 1) * loan amount * monthly interest rate 2

Total repayment amount = (number of repayment months + 1) * loan amount * monthly interest rate 2 + loan amount.

The difference between equal principal and interest and equal principal: 1. The monthly repayment amount is different, the monthly repayment amount of equal principal and interest is the same, and the repayment amount of equal principal decreases month by month; 2. The total amount of interest is different, and the total interest of equal principal and interest is higher; 3. The repayment pressure is different, the pressure of equal principal and interest in the early stage is small, and the pressure of equal principal in the early stage is large.

Hello, the choice of repayment method actually depends on your actual situation. The actual situation of different customers corresponds to the appropriate repayment method is different, from the equal amount and equal principal repayment method in the monthly payment and the final repayment of the interest rate to compare, the equal repayment method in the interest rate remains unchanged, is to fix the monthly payment amount in advance, convenient for you to remember. The equal principal repayment method is to divide the principal amount of your loan into equal amounts over the term of the loan, and repay the same portion of the loan principal each month.

Because the monthly repayment interest is calculated based on the loan principal, the equal principal repayment method has higher requirements for the customer's initial repayment ability, and the initial repayment pressure will be greater, but the monthly payment is decreasing on a monthly basis, and the pressure will be smaller and smaller in the later stage of repayment. At the same time, if the interest rate and other conditions remain unchanged, the interest part of the final repayment of the loan will be higher than that paid by the equal principal repayment method.

Equal principal and equal principal and interest are two common repayment methods. Equal principal and interest is the repayment of the same amount of loan (including principal and interest) every month during the repayment period. It is not the same concept as equal principal repayment, although the monthly repayment amount may be lower than the equal principal repayment method at the beginning of the repayment, but the final interest repayment will be higher than the equal principal repayment method, which is often used by banks.

Equal principal refers to the equal amount of the loan during the repayment period, and the same amount of principal and the interest accrued by the remaining loan in that month are repaid 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 over time.

For the former, the monthly repayment is the same, and the latter monthly repayment is different, where the principal is the same, but the interest is different.

There is a clear difference between the total monthly repayment amount of the two: equal principal and interest, that is, the sum of principal + interest repaid each month always remains unchanged.

The equal principal amount means that the principal part of the total monthly repayment remains unchanged, and the interest is calculated separately. For example, if you borrow 500,000 yuan and want to repay it in 50 months, you will have to repay the principal of 10,000 yuan per month according to the equal principal method, plus interest.

The difference between equal principal and equal principal and interest.

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

The difference between equal principal and equal principal and interest is mainly reflected in: the monthly repayment amount is different; The interest accrued is different; Suitable for different groups of people.

Equal principal repayment is to start with more repayment, and then repay less and less, and equal principal and interest repayment is fixed every month.

The difference between equal principal and equal principal and interest.

The equal principal and interest is the same amount that you repay every month, and the interest included in the first few months is more and the principal is less: the equal principal is the same as the principal repaid every month, and the repayment amount each month becomes less because the principal owed is less, so the repayment amount is less.

The difference between equal principal and equal principal and interest is mainly reflected in the following aspects:

1. The monthly repayment amount is different.

Under the equal principal repayment method, the monthly repayment amount is decreasing, and the borrower's monthly repayment principal is fixed, but the repayment interest will decrease with the decrease of the principal. With the equal principal and interest repayment method, the monthly repayment amount is fixed, but the proportion of principal and interest in the monthly repayment amount will change, and the proportion of interest in the early repayment amount is large, and with the monthly repayment, the interest proportion will be less and less, and the proportion of principal will be more and more.

Second, the interest generated is different.

The total amount of interest accrued is different under the two repayment methods of equal principal and equal principal and interest. For example, if you have a loan of 500,000 yuan, the loan term is 1 year, and the loan interest rate is, then under the equal principal and interest repayment method, the total interest generated is RMB, and under the equal principal repayment method, the total interest generated is RMB.

Third, the suitable people are different.

Fourth, under the equal principal repayment method, the early repayment amount is higher, and with the monthly repayment, the interest will decrease month by month, so the repayment amount will also decrease month by month, which is suitable for people who have more money at present; The monthly repayment amount of equal principal and interest is the same, which is suitable for people with a certain fixed income every month.

Interest is calculated on a loan of equal principal using a simple interest rate method. At the settlement time of each instalment, it only accrues interest on the remaining principal (loan balance), that is, the unpaid loan interest is not calculated together with the unpaid loan balance, and only the principal is calculated as interest.

Equal principal and interest loans are calculated at compound interest rates. At the settlement time of each instalment, the interest generated by the remaining principal is calculated together with the remaining principal (loan balance), which means that the unpaid interest is also calculated, which seems to be more powerful than "rolling interest". In foreign countries, it is recognized as a way of lending that suits the interests of lenders.

Therefore, under the traditional repayment method, the longer the loan period, the more interest will be generated on the equal principal and interest loan than on the equal principal loan. Therefore, if the borrower is unable to adjust (or choose) the repayment method, the longer the loan period, the more the borrower should choose the same principal loan.

1. Suitable people for equal principal and interest.

The monthly repayment amount of equal principal and interest is the same, so it is more suitable for families with normal spending plans, especially young people, and as they get older or move up their positions, their income will increase, and their living standards will naturally rise. If such people choose the principal method, the pressure in the early stage will be very great.

Equal Principal and Interest Calculator: The biggest feature of the equal principal method is that the monthly repayment amount is different, showing a state of decreasing month by month; It is to divide the loan principal evenly according to the total number of months of repayment, plus the interest on the remaining principal of the previous period, so that the monthly repayment amount is formed, so the repayment amount in the first month of the equal principal method is the most, and then decreases month by month, and the more you repay, the less you repay.

Note: In the equal principal method, people always repay the same amount of principal each month, and the interest decreases as the remaining principal decreases, so their monthly payments gradually decrease.

From the above, we can see that under normal circumstances, the total interest paid on the equal principal and interest is more than the equal principal, and the longer the loan term, the greater the difference in interest.

2. What is equal principal and interest?

The principal increases month by month, the interest decreases month by month, and the monthly repayment amount remains the same.

Equal principal and interest refers to the 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 equal principal and interest repayment method has a balanced repayment pressure but needs to pay more interest, which is suitable for people who have a certain amount of savings, but their income may be flat or declining, and their living burden is increasing, and they do not plan to repay early.