1. Interest-free

For installment payment, banks often call it "interest-free", that is, they don't charge interest. Interest-free does not mean that there is no fee, but a handling fee is charged for installment banks. The essence of installment fee is another way of saying interest.

2. Repayment of principal and installment fee

Repayment of principal in each installment = total installment amount ÷ number of installments;

installment fee = installment total amount * installment fee rate.

for example, the credit card will be paid off in 12 installments with a monthly handling fee of .6%, and the principal of 1 yuan plus interest of 6 yuan will be repaid every month.

in the first month, I still owed the bank 12, yuan and paid 6 yuan interest.

in the second month, I still owed the bank 11, yuan and paid 6 yuan interest.

in the third month, I still owed the bank 1, yuan and paid 6 yuan interest.

.............................

In the tenth month, I still owed the bank 3, yuan and paid 6 yuan interest.

in the 11th month, I still owe the bank 2, yuan and pay 6 yuan interest.

in the twelfth month, I still owe 1 yuan the bank and pay 6 yuan interest.

in the first month, I still owed the bank 12, yuan and paid 6 yuan interest.

in the second month, I still owed the bank 11, yuan and paid 6 yuan interest.

in the third month, I still owed the bank 1, yuan and paid 6 yuan interest.

.............................

In the tenth month, I still owed the bank 3, yuan and paid 6 yuan interest.

in the 11th month, I still owe the bank 2, yuan and pay 6 yuan interest.

in the twelfth month, I still owe 1 yuan the bank and pay 6 yuan interest.

did you find any problems? The more money you owe to the bank, the less money you owe to the bank, but the interest you pay to the bank is the same every month.

3. Nominal rate and actual rate

Credit card installment is average capital, which means that you have to repay the principal every month, so in fact, the funds you use will be less and less. You borrowed 1, yuan, and after paying it back for half a year, you are still actually using it.