When our banks apply for loans, they often have various methods, and some people are not very familiar with these methods. Next, the editor will tell you what the equivalent principal amount of provident fund is, so that you can know more.
What is the equal repayment method for provident fund equal principal, that is, the borrower repays the loan principal and interest in a flat amount 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.
Since the monthly repayment amount is the same, in the early stage of the loan, after deducting the monthly interest, the loan principal repaid is less; in the later stage of the loan, the loan principal remains constant.
As the monthly repayment amount is reduced, the loan interest is also continuously reduced, and the monthly loan principal repayment is larger.
This repayment method actually takes up a larger amount of bank loans and a longer period. At the same time, it also facilitates borrowers to reasonably organize their monthly daily life and conduct financial management (such as renting a house, etc.). For those who are proficient in investment and good at
For people who "make money with money", it is undoubtedly the best choice.
The equal principal repayment method means that the borrower repays the loan principal at the same amount every month (loan amount/number of loan months). 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 two are calculated.
That is the monthly payment amount.
What you need to know about provident fund equivalent principal 1. Provident fund loans or loans with discounts.
As we all know, provident fund loan interest rates are low, and it is not a wise idea for home buyers to repay early. In addition, if there is a discounted loan and you repay early, you may lose money. Fangguo’s house buying guide
I once heard bank staff mention privately that for loans that enjoyed lower discounted interest rates, banks did not make any money at all, just to expand business scale.
Now that we are in the interest rate cut channel again, if you are applying for a provident fund loan, or enjoying a loan with a low discount, it is better to use the money to do some financial management if you repay it early, such as buying some funds with stable performance, or with a rating of AA or above.
2. The equal principal repayment date is now more than one-third of the loans.
The equal principal amount means dividing the total amount of the loan equally, and the repayment interest is calculated based on the remaining principal.
In other words, the later this method reaches, the less principal will be left and the less interest will be generated.
If you have repaid more than one-third of the loan, it means that you have repaid nearly half of the interest. What you will repay in the later period is more of the principal, and the interest will have little impact on the repayment amount.
3. The equal repayment of principal and interest has reached the mid-term loan.
Equal principal and interest is to add the total principal and interest of the mortgage loan and then spread it evenly over each month.
In other words, the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.
By the middle of the repayment period, most of the interest has been repaid, so repaying the loan early does not make much sense.
If you need to know what the equivalent principal amount of provident fund is, you can refer to the content written in the above article, which will make it clearer.