How is the principal and interest calculated, and what does the principal and interest mean

You should be talking about equal principal and interest.

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, that is, the total principal and total interest of the mortgage loan are added and then evenly spread over 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.

Calculation formula: Monthly repayment amount = [Loan principal Monthly interest rate.

1+Monthly Interest Rate) Number of Repayment Months] [1+Monthly Interest Rate) Number of Repayment Months 1].

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The principal and interest are calculated according to the total principal no matter how much principal you have repaid!

You are talking about equal principal and interest, that is, the amount of the loan divided by the number of periods plus the fixed interest every month until the end, and the interest will not decrease with the decrease of the loan amount, which is equal principal and interest.

Principal and interest of the loan:"Loan. "Usually refers to a bank loan.

or CPF loans; "Ben"Refers to the principal. i.e. the amount of money obtained by the lender; "information"Refers to interest, which is the amount paid by the lender. "Principal and interest of the loan:"It is the total amount of principal and interest on the loan.

Equal principal and interest refers to a repayment method for a home loan, which is to repay the same amount of loan (including principal and interest) every month during the repayment period. Calculation formula: [Loan principal monthly interest rate.

1+Monthly Interest Rate) Number of Repayment Months] [1+Monthly Interest Rate) Number of Repayment Months 1].

The principal interest of the loan refers to the total amount of the amount obtained by the lender and the amount to be repaid in the process of bank loan or provident fund loan, which is usually expressed in two parts: "principal" and "interest". "Principal" means the amount obtained by the Lender, i.e., the principal; "Interest" refers to interest, which is the amount that the lender needs to repay. In the equal principal and interest repayment method, the amount of loan principal and interest repaid each month is fixed, and the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and settled monthly.

The principal and interest of the loan are important debts that the lender needs to bear, and the repayment needs to be repaid on time according to the repayment plan and repayment method agreed in the contract.

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Loan principal and interest refers to the total amount obtained by the lender and the amount repaid by the lender in the course of a bank loan or provident fund loan.

Principal and interest of loans: "Loans" usually refer to bank loans or provident fund loans; "Principal" means the principal, i.e. the amount received by the Lender; "Interest" refers to interest, which is the amount paid by the lender.

It refers to the remuneration that the lender receives from the borrower for issuing monetary funds, and it is also the consideration that the borrower must pay for using the funds. The bank loan interest rate refers to the ratio of the amount of interest to the principal amount during the term of the loan.

The interest rate of the loan contract with a bank or other financial institution as the lender is determined, and the parties can only negotiate within the upper and lower limits of the interest rate set by the People's Bank of China. If the loan interest rate is high, the borrower's repayment amount will increase after the loan term, and vice versa, it will decrease. There are three main factors that determine the interest rate on a loan:

Loan amount, loan term, loan interest rate.

Principal and interest of loans: "Loans" usually refer to bank loans or provident fund loans; "Principal" means the principal, i.e. the amount received by the Lender; "Interest" refers to interest, which is the amount paid by the lender. "Loan principal and interest" is the total amount of principal and interest on the loan.

Principal: the principal amount of the loan;

Interest: Interest on the loan.

Equal principal and interest is a repayment method, that is, the borrower repays the loan principal and interest in equal amounts every month, where 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 repayment amount is equal, the principal amount of the loan will be less in the initial monthly repayment after excluding the interest settled on a monthly basis. In the final monthly repayment of the loan, the principal of the loan is repaid more after excluding the interest settled on a monthly basis.

The repayment method is to add the total principal amount of the mortgage loan to the total interest, and then distribute it evenly to each month of the repayment period, and the monthly repayment amount is fixed, but the proportion of the 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 and interest repayment method means that the borrower repays the principal and interest of the loan 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. The equal principal repayment method means that the borrower repays the loan principal in equal amounts 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.

Equal principal and interest, with an equal amount to be repaid in each period, including a part of the principal and interest payable for the current period. Along with "equal principal", it is the most common repayment method for mortgage loans. The equal principal and interest repayment method means that the borrower repays the principal and interest of the loan 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.

Since the monthly repayment amount is equal, the principal amount of the loan will be less in the initial monthly repayment after excluding the interest settled on a monthly basis. 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 loans and occupies a longer period of time, and it is also convenient for borrowers to reasonably arrange their monthly life and financial management, which is undoubtedly the best choice for those who are proficient in investment and good at "making money from money".

When we repay the loan we have applied for, we will have a concept of equal principal and interest, which actually means that during the repayment period, we need to repay the same amount of loan every month, which includes the principal and interest.

When we repay the loan with equal principal and interest, the monthly repayment amount (principal + interest) = [loan principal monthly interest rate (1 + monthly interest rate) number of repayment months] [1 + monthly interest rate) number of repayment months 1].

For example, if I borrow 10,000 yuan for 1 year with a monthly interest rate of 1%, then my monthly repayment amount = [10,000 1% (1+1%) 12] [1+1%) 12 1] 88,849 yuan.

Among them, the interest payable on the first installment of the loan should be 100 yuan, and the principal payable should be 78,849 yuan. So after the first installment, I still owe 9,000 yuan, so the interest payable in the second installment becomes 9,000 1% = 90 yuan.

If you are not clear about your online loan application, you can try to get a big data report on "Beijian Quick Check", check your detailed loan records, and then confirm that it is your own loan, at this time, you should pay off all the money you owe and then contact the customer service of the corresponding platform to let them deal with it and see if the online loan blacklist can be eliminated.

Extended Information: What does the equal principal repayment method mean?

The equal principal repayment method refers to the allocation of the principal amount of the mortgage that the borrower needs to repay over all the repayment months, and then calculates the loan interest.

The equal principal repayment method is characterized by the fact that when the borrower repays, the monthly payment amount in the early stage is relatively large, and with the decrease of the loan principal, the loan interest is also decreasing, so the monthly payment amount is also decreasing.

Because the upfront repayment pressure of the same principal is relatively large, the bank has higher requirements for the qualifications of the buyers, and the income of the buyers is also more important.

The biggest disadvantage of the equal principal is that the pressure of repayment in the early stage is relatively large, and the general home buyer will feel that the pressure of loan repayment is relatively large. If the buyer's income is only more than 2 times the monthly payment, then the bank is likely not to approve it. Under normal circumstances, it is easier to apply for the same amount of principal if the monthly income is more than multiple of the monthly payment amount.

The advantage of the equal principal amount is naturally that the interest on the loan is relatively small. Compared with the same amount of principal and interest, the same installment time, the same loan principal, and the same loan interest rate, the loan interest of the equal principal is much less than that of the equal principal and interest. Sometimes it can even save hundreds of thousands of dollars in interest.

1.Loan principal and interest refer to the principal and interest of the loan. Early repayment.

Whether it is cost-effective depends on the loan contract. If the interest rate is high, repay the loan early.

There are no penalty penalties.

Then it should be returned in advance. If the interest rate is low (discounted), or the penalty is high, do not pay it early. There are two ways to repay the loan: equal principal and equal principal and interest.

After the same amount of time the loan is used, the interest paid under the "equal principal and interest repayment method" will be higher than that under the "equal principal repayment method", and the interest paid at the time of prepayment is non-refundable, which is relatively more than the interest that should not have been paid in advance.

2.Therefore, if you plan to repay the loan early, it is better to choose the "equal principal repayment method" to repay the loan, so that the prepayment is more cost-effective. However, it should be noted that some users with financial pressure are not suitable for using the "equal principal repayment method" to repay the loan, depending on your own financial plan.

For those with high salaries or diverse incomes, it is advisable to use the "equal principal repayment method".

Extended Materials. 1.Generally speaking, the earlier the prepayment of the loan, the more appropriate, but the bank generally requires the loan to be repaid for one year before it can be repaid in advance.

Under the condition that the loan period is the same, the interest to be paid under the equal principal and interest repayment method is higher than that under the equal principal repayment method. Therefore, if you plan to repay the loan early, it is best to choose the equal principal repayment method.

2.The term "loan" for loan principal and interest usually refers to a bank loan or a provident fund loan.

"Principal" means the principal, i.e. the amount received by the Lender; "Interest" refers to interest, which is the amount paid by the lender. "Loan principal and interest" is the total amount of principal and interest on the loan. Calculation of principal and interest: principal + principal * annual interest rate.

Time (if the tax on the interest will be deducted.)

The formula is principal + principal * annual interest rate * time * (1 - interest rate)). Nowadays, it is common to use the repayment method of equal principal and interest, that is, the total principal amount of the mortgage loan and the total amount of interest are added together, and then evenly spread over 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.

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 on repayment is different, and the total interest on equal principal and interest is higher;

3.The repayment pressure is different, the pressure of equal principal and interest is small in the early stage, and the pressure of equal principal is high in the early stage.

Extended Materials. Equal principal amount.

Equal principal and interest loans are calculated at compound interest rates. At the settlement time of each instalment, the interest accrued on the remaining principal amount is calculated together with the remaining principal amount (loan balance), which means that the unpaid interest is also accrued. In foreign countries, it is recognized as a way of lending that suits the interests of lenders.

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" of the monthly payment, the proportion of interest repaid in the first half of the period is large and the proportion of principal is small. After the repayment period is more than halfway, it gradually turns into a large principal ratio and a small interest ratio.

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), which means that the unpaid loan interest is not calculated as interest together with the unpaid loan balance, but only the principal is calculated as interest.

The monthly repayment amount decreases, 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 as to form a monthly repayment, so the repayment amount of 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.

Compared with the two, when the loan term, amount and interest rate are the same, the monthly repayment amount of equal principal repayment method is greater than the equal amount of principal and interest at the initial stage of repayment. However, based on the entire repayment period, the equal principal repayment method will save the loan interest expenses.

The advantage of equal principal and interest is that the monthly repayment amount is the same, which is convenient for arranging income and expenditure, suitable for economic conditions, and does not allow excessive investment in early repayment, and the income is in a relatively stable state. The downside is that you need to pay more interest. However, most of the amount repaid in the previous period is interest, and the proportion of the principal only increases after the repayment period is more than halfway, so it is not suitable for early repayment.

The advantage of equal principal is that the total interest is less relative to equal principal and interest. The repayment amount decreases every month, and it will be easier to repay it later on. And because the proportion of principal repaid in the early period is larger, and the interest ratio is smaller, it is very suitable for early repayment.

The disadvantage is that the early repayment pressure is greater, and it needs to have a certain economic foundation and be able to bear the greater repayment pressure in the early stage.

Which is suitable for early repayment?

The same amount of principal is repaid in the early stage and the interest expense is small, so it is obviously more suitable for early repayment.

In the monthly repayment amount of equal principal and interest in the previous period, the principal ratio is small and the interest ratio is large, which is not suitable for early repayment.