Matching principal and interest repayment method is a repayment method, that is, the borrower repays the loan principal and interest in equal amount every month, but the proportion of principal in the monthly repayment amount increases month by month, and the proportion of interest decreases month by month. The calculation method of equal principal and interest repayment is as follows:

Monthly repayment amount = loan principal × [monthly interest rate× (1+monthly interest rate) repayment months ]/{[( 1+ monthly interest rate) repayment months ]- 1}.

Matching principal and interest repayment method Monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled monthly. Because the monthly repayment amount is equal, in the initial monthly repayment of the loan, after excluding the interest settled on a monthly basis, the loan principal is less. ? This repayment method actually takes up more bank loans and takes longer.

Extended data:

Another repayment method-average capital

During the repayment period, the average capital divides the total loan into equal parts, and repays the same amount of principal and the interest generated by the remaining loans in that month every month. In this way, because the monthly repayment amount is fixed and the interest is getting less and less, the borrower is under great pressure to repay at first, but as time goes on, the monthly repayment amount is getting less and less. It is more convenient to determine the repayment ability according to your own income.

The total expenditure of this repayment mode may be reduced relative to the matching principal and interest, but the repayment pressure is greater at first.

References:

Baidu Encyclopedia-Equal principal and interest repayment method

References:

Baidu encyclopedia-average capital