The loan balance refers to the loan principal that has not been paid off as of the inquiry date. For example, the loan is 6,543,800 yuan, and the credit report shows that the loan balance is 50,000 yuan, which means that the bank loan still has 50,000 principal.

The loan balance refers to the outstanding loan at the end of the accounting period, which is equal to the total loan minus the repaid bank loan. That is, the loan balance of short-term loans or long-term loans = the loan balance of the previous period+the amount incurred by the lender (increase in financing)-the amount incurred by the borrower (repayment of loans).

Calculation formula of matching principal and interest in loan balance (monthly repayment amount) = [loan principal × monthly interest rate ×( 1+ monthly interest rate )× repayment months ]=[( 1+ monthly interest rate )× repayment months]

Average fund calculation formula (monthly repayment amount) = (loan principal/repayment months)+(principal-accumulated amount of repaid principal) × monthly interest rate.

Matching loans are divided into equal principal and interest loans and average capital loans. Compared with ordinary capital loans, ordinary capital loans can save a lot of interest under normal repayment conditions.

1. Matching principal and interest loan: compound interest is adopted. At the settlement time of each repayment, the interest generated by the remaining principal will be calculated together with the remaining principal (loan balance), that is to say, the outstanding interest will also be calculated, which seems to be more severe than "rolling interest". In foreign countries, it is recognized as a loan method suitable for the interests of lenders.

2. Average capital loan: interest is calculated by simple interest rate method. At the settlement time of each repayment, only the interest of the remaining principal (loan balance) is calculated, that is to say, the interest of the outstanding loan is not calculated together with the outstanding loan balance, only the principal is calculated.

3. Therefore, under the traditional repayment method, the longer the loan cycle, the more interest the loan with the same principal and interest will generate than the average capital. Therefore, if the borrower cannot adjust (or choose) the repayment method, the longer the loan period, the more the borrower should choose the average capital loan.

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