The most intuitive embodiment of the two repayment methods is that the repayment amount of equal principal and interest is a fixed monthly amount; The monthly repayment amount of average capital is more or less decreasing month by month.

Second, the monthly repayment amount is different.

The monthly repayment amount of average capital is different, showing a state of decreasing month by month; It divides the loan principal equally according to the total repayment months, plus the interest of the remaining principal in the previous period, thus forming the monthly repayment amount. So the repayment amount in the average capital is more than one month, and then decreases month by month, less and less.

Matching principal and interest means the same monthly repayment amount. In essence, the proportion of principal increases month by month, the proportion of interest decreases month by month, and the number of monthly repayments remains unchanged. That is to say, in the "principal and interest" distribution ratio of monthly payment, the proportion of interest repaid in the first half is large, and the proportion of principal is small, and it gradually turns into the proportion of principal and interest is small after the repayment period is over half.

Third, it is suitable for different people.

The average capital method is more suitable for lenders with strong repayment ability some time ago because the repayment amount in the early stage is relatively large and then decreases month by month.

The monthly repayment amount of equal principal and interest is the same, so it is more suitable for families with normal consumption plans, especially young people. Moreover, with the promotion of age or position, income will increase and living standards will naturally rise; If this kind of person chooses the principal method, the early pressure will be very great.

Extended data:

Whether it is equal principal and interest repayment method or average capital repayment method, the nature of interest will not change. Interest rates are determined by the impatience of countless people. Because of impatience, that is, impatience, people always want to enjoy it early, so there is an exchange of "spot" and "futures"; It is precisely because of impatience that the "futures" farther away from today, the lower their value.

Therefore, in order to realize the transaction between "spot" and "futures", the number of "futures" must be greater than "spot", and the difference between them determines the interest rate.

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