Equal installments and equal interest generally refers to equal installments of principal and interest, which refers to a loan repayment method. Equal principal and interest is the repayment of the same amount of loan (including principal and interest) every month during the repayment period.

The repayment method adds the total principal and interest of the mortgage loan, and then evenly distributes it to each month of the repayment period. The monthly repayment amount is fixed, but each month The proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month. This method is currently the most common and is also the method recommended by most banks for a long time.

The equal principal and interest repayment method means that the borrower repays the loan principal and interest in equal amounts every month, in which the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and is settled month by month.

The equal principal repayment method means that the borrower repays the loan principal in an equal amount (loan amount/number of loan months) every month. The monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and is settled month by month. The total of the two is the monthly repayment amount.

The monthly repayment amount is calculated as follows:

[Loan principal×monthly interest rate×(1+monthly interest rate)^number of repayment months]÷[(1+monthly interest rate) )^Number of repayment months-1]

Whether it is the equal principal and interest repayment method or the equal principal repayment method, the essence of interest will not change. Interest rates are determined by the collective impatience of countless people. Due to impatience, that is, impatience, people always want to enjoy it early, so the exchange of "spot" and "futures" appears;

It is precisely because of impatience that the farther away "futures" are from today, Its value is lower. Therefore, in order to achieve a transaction between "spot" and "futures", the quantity of "futures" must be larger than the quantity of "spot", and the difference determines the level of interest rates.

The monthly repayment amount is the same. Essentially, the proportion of principal increases month by month, the proportion of interest decreases month by month, and the monthly repayment amount remains unchanged, that is, in the monthly payment of "principal" In the distribution ratio of "deposit and interest", the interest repaid in the first half of the period is larger and the principal is smaller. After half of the repayment period, it gradually changes to a larger proportion of principal and a smaller proportion of interest.

Equal-amount principal loans use a simple interest rate method to calculate interest. At the settlement time of each repayment, it only calculates interest on the remaining principal (loan balance). That is to say, the unpaid loan interest is not calculated together with the unpaid loan balance, but only the principal is calculated as interest. calculate.

The monthly repayment amount decreases month by month; it divides the loan principal evenly according to the total number of months of repayment, plus the interest on the remaining principal of the previous period, so that The monthly repayment amount is formed, so the equal principal payment method has the highest repayment amount in the first month, and then decreases month by month, and the more you repay, the less it is.