For many people who sell houses with loans, there are two most common ways of repayment: equal principal and interest repayment and equal principal repayment. So, what's the difference between these two ways of repayment? Let's take a look with Xiaobian.
Through comparison, it is found that the repayment amount of equal principal and interest per period is the same, that is to say, the total amount of principal and interest payable per month is the same. The advantage of this method is that it is easy to remember, the pressure of repayment is balanced, but the interest payment is more;
But the equal principal has the same principal and different interest, but the early repayment pressure is large, but it can save a lot of interest for the borrower.
Take the loan with a term of 500000 for 20 years as an example, and calculate according to the current benchmark interest rate of the loan:
The borrower needs to pay 398223.63 yuan of interest after 20 years;
The borrower needs to pay the interest of 328864.58 yuan after 20 years. From the calculation results, we can also see that the equivalent principal will save interest of 69359.05 yuan compared with the equivalent principal and interest.
The repayment pressure of equal principal and interest repayment method is balanced, but it needs to pay more interest, so it is suitable for people who have certain savings and do not intend to repay in advance. The equal principal repayment method, because the lender repays the principal quickly, can pay less interest, but the amount of repayment in the early stage is large, so it is suitable for those with higher income at present, which is more favorable for those who are prepared to repay in advance. Building mainly look at their own situation, can make a clear choice.