Matching service and matching principal loan loan

Keywords: matching interest loans, matching the principal loan, loan, the repayment

 

Sequence

Domestic banks launched the first loans is matching interest loans. But in 2003 June, the sudden media, said the bank had a matching principal loans did not tell consumers. And just a account, buy a house loan 400000 yuan for 30 years, the former more interest 100000 yuan than the latter. Consumer complaints about the. So some of the media are summarized as follows:

Compared with the matching interest loans and loan repayment matching principal, under normal circumstances, matching the principal loan can save a lot of interest. But why in foreign countries, the use of matching interest loan borrowers can save more interest than matching the principal loan? When you understand the loan, you will find that there are tens of thousands of borrowers every year needlessly pay with tens of thousands of interest.

Below, I to in-depth analysis of these two kinds of loans, so we can draw a conclusion,Matching interest loans through the adjustment of the repayment, can save interest and save time, better than matching the principal loan.

 

Method of two kinds of loan interest calculation

Below we first analyze the differences between these two kinds of loans in the traditional way of repayment.

In the calculation of interest, matching interest loans why and matching principal loans are so different? The reason is that both the calculation of interest in different ways.

Matching interest loansUsing the compound interest calculation. In each repayment settlement time, the remaining principal interest generated and the remaining principal (loans) are of interest, that is to say the unpaid interest to interest bearing, it seems worse than "compound interest". In foreign countries, it is accepted for lending interest loans.

Matching principal loanUsing the simple way of calculation of interest rates. In each repayment settlement time, it only on the remaining principal (loan) interest, that is to say not to pay interest on loans is not with unpaid loans with interest calculation, and only the principal for interest calculation.

Therefore, in the traditional way of repayment, the loan period is longer, matching interest loans to produce more than matching principal, loan interest. SoIf the borrower is unable to adjust, (or) repayment of loan words, the longer the period of borrowers, the more should choose matching principal loan.

 

Each characteristic of two kinds of loan repayment

Let us continue to analyze the difference between two kinds of loans.

Although matching principal loan can save a lot of interest, but the matching principal loan "shortcomings" isEach repayment amount it is different, and it is early repayment amount is heavy, late repayment amount is light. This requires the borrower's repayment ability to adapt to this situation. But such "shortcomings but not for matching interest loans",It is the same amount of each repayment. The borrower can easily according to their repayment ability, making a loan scheme. But it is necessary to pay attention to,Matching principal repayment loans each varied, but each average repayment amount it is matching interest loans are much lower than. The following two screenshots from the "loan analyst" software, display each repayment two loan.

• Matching interest repayment table (in part): the same amount of each repayment

• Matching principal repayment table (in part): each repayment different

The analysis below, will be able to further reveal the mystery of the loan.

 

Comparison of two kinds of repayment

The characteristics of the two kinds of mortgage their, I used the form as follows.

	Matching interest loans	Matching principal loan
Interest bearing manner	Simple interest rate	The composite interest rate
Each repayment of principal and interest	Equal	Not matching (early, late light)
Each repayment of principal	Early light, the late heavy	Equal
Each repayment interest	Early, late light	Early, late light
Soaring interest rate	Acceleration	Uniform velocity
The domestic popularity	Main stream	Weak current (?)
The international popularity	Main stream	Weak weak stream
Flexible operation	Strong	Weak
The calculating difficulty	Difficult	More difficult
Evaluation	Can create the best repayment scheme, can make the worst plan.	Choose it right, but may not be the best

Note on the table, matching interest loansPopularityAndOperating flexibilityMore than matching principal loan. Because the matching interest loans to occupy a dominant position, so many mathematicians conducted in-depth research, and found that the matching interest loans,In addition to outside influence interest rates, repayment and loan period of interest is very big.

 

Beyond one of the matching principal loan: biweekly accelerated repayment

Due to the popularity of computer and software engineering efforts, now people can like loan actuary, easily grasp the loans of various calculation methods, and carefully to the loan scheme comparison, in-depth understanding of the diversity of loan method. This makes the borrower can according to their own economic situation, the flexibility to use some method of repayment, to reduce interest, shortening the duration of the loan, the loan interest rate changes caused by reduced pressure.

Matching interest loansBiweekly accelerated repaymentCan be used to reduce interest, shortening the duration of the loan, to achieve the same effect with the matching principal loan.

Here I use a simple example to illustrate. Suppose you loan 30 years 500000 yuan, calculated by matching interest repayment of loan standards, matching interest loans biweekly accelerated repayment, matching principal loans in three ways. Loan interest rate of 6.39%. Below I used the loan analyst software (Personal Edition) the two screenshots to show their difference.

• Matching interest loans screenshot: Standard (calculated by matching interest repayment loan calculator)

• Matching principal loan screenshots (with matching principal loan calculator)

• Matching interest loans screenshot: biweekly accelerated repayment (calculated by matching interest loan calculator)

• Comparison of biweekly accelerated repayment and matching principal loan

According to the above three screenshots produced under the table, so that you are.

	Standard matching interest loan repayment (Reference)	Matching principal loan	Biweekly matching interest loans accelerated repayment
The original principal	500000	500000	500000
The loan interest rate	6.39%	6.39%	6.39%
Loan period	30 years	30 years	24 years and 1 months
Payment frequency	Payment once a month	Payment once a month	Pay once every two weeks
The monthly payment amount	¥ 3124.26 (months)	¥ 2723.84 (on average)	¥ 3124.26 (4 weeks)
Accrued interest	¥ 624733.6	¥ 480581.25	¥ 483100.27
Repayment period	The 360 period	The 360 period	The 629 period
Save interest	---	¥ 144152.35	¥ 141633.33
Save time	---	The 0 day	The 2135 day
Each year more than the repayment	---	The annual repayment of unequal	¥ 3124.26
Loan cost rate	124.95%	96.125%	96.62%

Matching interest repayment of loan standards for reference, from the table can be seen, matching interest loans in the biweekly accelerated repayment as matching the principal loan, can save a lot of interest. Biweekly accelerated repayment although than matching principal loan to pay 2500 yuan of interest, but loans than matching the principal loan period can nearly 6 years.

Matching interest loans in the biweekly accelerated repayment looks good, but in the American, select its borrowers to only a very small part of the people, most of the borrowers to choose is matching interest loans inAdditional paymentMethod. It is a bi weekly repayment method is more convenient, more flexible, more money.

 

Beyond two: matching principal repayment of loans for additional

In the matching interest loans, the repayment in advance, is the basic method to save interest on loans and shorten the loan period, also is the most effective method. It mainly has two ways, one is theAccelerated repayment, another was introduced hereAdditional payment. Additional repayments are more simple, flexible, in foreign countries, it is the main way of repayment of the borrower. Method is the most typical in each of the last payment, pay a sum of the same amount of repayment.

Because this method is more flexible, so, if the borrower to achieve your financial goals, you need after several trial to determine their ownThe extra time, frequency and the amount of repayment. Here, in order to illustrate this repayment method can save more interest than matching the principal loan, the borrower has assumed such a loan, the loan period is 500000 yuan for 30 years, the monthly repayment of a loan, the annual interest rate is 6.12%, after several trial after the discovery, in the normal repayment table every last payment, pay a sum of 3360 yuan repayment, then total loans interest just began to aggregate interest than matching principal loan.

• Additional loan repayment matching service table (part)

• Additional comparisons with matching principal repayment of loans

The comparison of two kinds of loans, shows the matching interest loans plus additional payments can save more interest than matching the principal loan. We can use an extra 3360 yuan repayment as a threshold to adjust the amount of interest savings: greater than the threshold value, the more interest than matching the principal loan save; smaller than the threshold value, than matching the principal loan interest savings less; when is equal to the threshold, then more than matching principal loan interest savings 151.46 yuan, saves the loan period of 5 years and 10 months (2129 days). So if borrowers choose matching principal repayment of loans, must consider additional corresponding or accelerated repayment.

• Comprehensive comparison

The calculation results of table comprehensive comparison, to more fully the matching interest loans and matching principal loan difference.

	Matching principal loan	Matching interest repayment of loan + Extra
The original principal	500000	500000
The loan interest rate	6.12%	6.12%
Loan period	30 years	24 years and 2 months
Payment frequency	Payment once a month	Payment once a month
The monthly payment amount	¥ 2667.43 (on average)	¥ 3036.44
Accrued interest	¥ 460275	¥ 460123.54
Repayment period	The 360 period	The 290 period
Save interest	---	¥ 151.46
Save time	---	2129 days (5 years 10 months)
Each year more than the repayment	---	¥ 3360
Loan cost rate	92.055%	92.024%

 

For borrowers, to manage their loan is an important financing project. SoIt is important to financial goals and repayment plans to develop according to their income, but not to save interest than matching the principal amount of the loan. Methods additional repayment matching service the loan plus to help borrowers flexible financial management. Adhere to the principle of money is money, make both ends meet, you can get rid of a sea of loan.

 

Remarks

Point of view:

• At present, people purchase loans because the risk is low, profit become the bank's quality projects. But the old people have to pay a heavy price in the economy. The original should is that some domestic banks to adopt various ways (such as pay prepayment penalty, limit the number of early repayment, or improve the early repayment of the amount each time) only allow people repayment in accordance with the regulations of the bank, and does not allow the people according to their own economic situation with other early repayment means to shorten the loan period and loan interest.
• Through the article"The prepayment and default payments"Can be seen, the foreign bank restrictions on repayment in advance in order to avoid loan cost by crowning calamity, and some domestic banks to limit early repayment is to maximize their profits. When interest rate rise, is the ordinary people to bear the loss, and the banks are in extreme cases continue to benefit benefit. If cannot achieve maximum benefits, that have their own losses, to borrow the so-called "follow the international practice" or "with international standards" as an excuse, Shouquweiyaojin to old people. This is the lack of the rationality of law, but also to people rights and interests exploit.
• Some people will biweekly accelerated repayment called giving benefits to people, in fact I think called fair and people more appropriate. I hope that those banks don't think only of foreign money market, more important is in line with the interests of ordinary people, enrich the content of services, improve service quality, to borrow the two sides share the benefits, achieve win-win results, to build a harmonious society the true.