Equal principal calculation method
The equal principal repayment method is a type of loan repayment that is characterized by the lender repaying the loan principal in equal amounts each month, and on this basis, the interest on the remaining outstanding loan is calculated. This method is different from the equal principal and interest repayment method, which includes principal and interest in a fixed monthly payment amount. This article will introduce the equal principal calculation method in detail to help readers better understand this concept.
1. The principle of the calculation method of equal principal.
The core of the equal principal calculation method is to distribute the loan principal evenly over each repayment cycle, and then calculate the interest payable in the current period based on the amount of the remaining outstanding loan. Specifically, the principal that the lender needs to repay each month is fixed, while the interest decreases as the outstanding loan principal decreases. Therefore, under the equal principal repayment method, the monthly repayment amount decreases month by month.
2. Calculation steps of the equal principal calculation method.
1.Determine the total amount of the loan and the term of the loan.
2.Calculate the monthly principal repayment: Monthly principal repayment = total loan amount Total number of loan months.
3.Calculate the interest payable in the first month: Interest payable in the first month = Total loan amount Daily interest rate The number of days between the loan disbursement date and the first repayment date.
4.Determine the amount of interest that will decrease each month: Amount of interest that decreases every month = Daily interest rate Total number of months of loan 2.
5.Calculate the interest payable in subsequent months: Interest payable in subsequent months = Interest payable in the previous month - Decreasing interest amount each month.
6.Calculate the monthly repayment amount: Monthly repayment amount = monthly principal repayment + interest payable in subsequent months.
Through the above steps, we can get the complete equal principal calculation method. A concrete example of how this approach can be used in practice will be illustrated below.
3. Examples of equal principal calculation methods.
Let's say someone applies for a personal home mortgage loan with a total amount of $2 million and a term of 20 years, with an annual interest rate of 49%。With the equal principal repayment method, we can calculate the monthly repayment amount by following the following steps:
1.The total amount of the loan is determined to be 2 million yuan, and the loan term is 20 years, a total of 240 months.
2.Calculate the monthly principal repayable: monthly principal payable = 2 million yuan 240 months = 833333 yuan.
3.Calculate the interest payable in the first month: interest payable in the first month = RMB 2 million daily interest rate (annual interest rate 360) (1 day + 2 days + n days) (n is the number of days between the repayment date of the first month and the loan date).