How to distinguish equal principal from equal principal and interest?

Definition of Equal Principal: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 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.

Equal Principal Loan Calculation Formula:

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

When you take out a small loan and the interest rate is low:

For example: a loan of 120,000 yuan, an annual interest rate, and a repayment period of 10 years;

Equal principal and interest: repayment after 10 years, total interest;

Equal principal: repayment after 10 years, total interest;

The difference between the two: 10 yuan, only 235 yuan a year.

The sum of the repayment expenses of the equal principal and interest model may be less than the equal principal and interest interest, but the repayment pressure is greater at the beginning.

Definition of equal principal and interest: Equal principal and interest is the repayment of the same amount of loan (including principal and interest) every month during the repayment period.

Calculation formula for equal principal and interest loans:

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].

3.The characteristics of the repayment of equal principal and equal principal and interest

Features of equal principal and interest repayment method:The principal of the equal principal and interest repayment method increases month by month, the interest decreases month by month, and the monthly repayment amount remains unchanged; The disadvantage of the equal principal repayment method is that the interest is more expensed, and the interest at the beginning of the repayment accounts for most of the monthly contribution, and the proportion of the 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.

Features of the equal principal repayment method:The principal of the equal principal repayment method remains the same, the interest decreases month by month, and the monthly repayment amount decreases; With a fixed monthly principal payment and less interest, the lender is initially stressed to make repayments, but the monthly repayments become smaller and smaller over time.

Compared with the two, when the loan term, amount and interest rate are the same, the amount repaid by the equal principal repayment method is greater than the equal principal and interest each month at the initial stage of repayment, but the monthly repayment amount is less than the equal principal and interest in the later stage. That is, the equal principal repayment method will save the loan interest expenses based on the calculation of the entire repayment period.

Generally speaking, the equal principal repayment method is suitable for borrowers who have a certain economic 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 month, and it is suitable for borrowers whose economic conditions do not allow excessive investment in early repayment and whose income is in a relatively stable state.

Comparing the two repayment methods, the equal principal and interest will pay considerable more interest than the equal principal when it is finally due.

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.

The difference between equal principal and equal principal and interest.

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

Equal principal is a gradual reduction of the monthly repayment amount, and equal principal and interest is a fixed monthly repayment amount.

The difference between equal principal and interest and equal principal.

Equal principal, equal principal and interest, stupid and unclear?

The main differences between the equal principal and interest method and the equal principal method:

The characteristics of the equal principal and interest method are: the monthly repayment amount is the same, and in the distribution ratio of "principal and interest" in the monthly payment, the interest proportion repaid in the first half of the period is large and the principal proportion is small, and the repayment period is more than half of the period, and gradually turns into a large principal ratio and a small interest ratio. The total interest spent is more than the equal principal method, and the longer the loan term, the greater the difference in interest.

However, since the repayment amount is the same every month, it is suitable for families, especially young people, to use the principal and interest method for their spending plan, as their income will increase as they get older or move up the ranks.

The characteristics of the equal principal method are: the monthly repayment amount is different, it is to divide the loan amount according to the total number of months of repayment (equal principal), plus the monthly interest of the remaining principal in the previous period, to form a monthly repayment amount, so the equal principal method The repayment amount in the first month is the most, and then decreases month by month, and the more you repay, the less you repay. The total interest spent is less than that of the equal principal and interest method.

However, this repayment method has a higher repayment amount in the early part of the loan period, which is suitable for borrowers who have strong repayment ability in the early part of the loan period, and the principal method can be used for the elderly, because the income may decrease as you get older or retire.

When taking out a loan, there are generally two different repayment modes, one is equal principal and the other is equal principal. The two approaches are very different.

Equal principal: The principal that needs to be repaid every month is the same, and the interest will gradually decrease as the principal gradually decreases.

Equal principal and interest: The monthly repayment amount is the same. Part of it is used to repay interest, and part of it is used to repay the principal.

For home buyers, the difference between the two approaches can produce very different results. Equal repayment of the principal can quickly reduce the repayment pressure and reduce the amount of money spent by the buyer on interest, but the repayment of the good money in the early stage is very painful. And more people choose equal principal and interest.

Comparatively speaking, the repayment interest will be less than the total interest of equal principal and interest repayment. Take a loan with a term of 20 years and a current interest rate of 1 million as an example, <>

The main reason is that although the equal principal will save about 140,000 yuan in the end, the repayment amount of the equal principal is more in the first 8 years. Therefore, although the interest on the equal principal amount will be less, in the first eight years, the repayment pressure of the equal principal and interest will be greater, and the benefit of less interest will not be felt at all.

From this point of view, equal repayment of principal and interest is actually to exchange more interest for less repayment pressure. At the same time, for home buyers with a small down payment, the repayment model of equal principal and interest can also support a larger loan.

People can come into contact with financial business in their daily lives, but many people may not know much about finance. I saw a netizen on the Internet asking such a question, what is the difference between equal principal and equal principal and interest?

Equal principal is to divide the principal equally, but the amount of repayment is different every month, and the amount of equal principal and interest is the same every month, so this is a very obvious difference between the two. In fact, this method is more flexible, if you choose equal principal and interest when you repay, then the money repaid every month is the same, generally speaking, you will choose equal principal and interest when you buy a house.

According to the above introduction, we all know that the most important difference between equal principal and equal principal and interest is the amount of repayment, and the amount of repayment is different, which means that the repayment calculation method of the two is different. The equal principal divides the loan amount evenly according to the number of each month, plus the monthly interest of the remaining principal of the previous period to repay, and the equal principal and interest is the interest ratio repaid in the first half is relatively large, the principal ratio is relatively small, and the second half of the period, the principal proportion is large and the interest ratio is small. Therefore, if you choose to repay the loan with equal principal and interest, it is actually better, in fact, both have their own advantages and disadvantages, and you still have to choose according to your own needs.

When the bank launches the loan business for everyone, it will also give you the corresponding repayment method, and there are many kinds of repayment methods, you can choose according to your actual situation, if you think that your ability to repay is relatively strong, then you can use the same principal to repay.

The difference is that the way of calculating the repayment interest is different, because the calculation rules are different, the equal principal amount will pay a lot less interest than the equal principal and interest.

The difference between equal principal and equal principal and interest: the monthly repayment amount is different, the monthly repayment amount of equal principal is decreasing, and the repayment amount is fixed every month by way of equal principal and capital increase; The equal amount of principal and interest is the same amount of repayment every month, and the first book width of the interest in the early intestinal repayment amount accounts for a large proportion; The total interest of equal principal repayment is less than the total interest of equal principal and interest repayment.

The equal principal amount means that the interest rate will not change regardless of the amount of your loan. The amount of principal and interest means that the interest will change to a certain extent with the amount you owe to the bank.