Differentiated payment and annuity: what better

Often, banking organizations offer an annuity loan repayment method.

In this article we will try to figure out the differentiated payment and annuity, so that you understand what will be most convenient for you.

Differentiated payment

The bottom line is that at the beginning of the loan agreement has to pay large payments, and then they gradually begin to decrease. All debt is divided by the same parts for the entire period.

Each month, the credit amount becomes less due to the repayment, which means that overpayment on the percentage exhibited will be reduced. It is for this reason that the first installment is always the biggest of all, and the latter is the smallest.

Advantage.

Inconvenience.

To approve you

Example

Ivan issued a loan agreement in the amount of

With a differentiated redemption method, the following amounts will be exhibited to payment:

· The first payment is 15,300 rubles;

· Last payment — 10 500 rubles;

· Common overpayment of 122 500 rubles.

Annuity Plantage

The same payment every month. The monthly payment of loan repayment will be constantly the same. In this case, at first, most of the payment will be sent to pay interest.

Advantage.

Inconvenience.

Example

Ivan changed his mind and wrote an application for the transition from a differentiated payment system to annuity. That is the same loan amount in

· Every month one is the same — 13 200 rubles;

· Total overpayment — 132 000 rubles.