After calculating the messy details for 15 apartments, Gong Mingxia found she needed 14.2 million yuan, but she only had ten million yuan on hand, meaning she needed to take out a loan of 4.2 million yuan.
Making fixed repayments over 20 years, she would need to pay back over 28,000 yuan each month, and over 20 years, the principal plus interest would amount to 6.6 million yuan, which meant she would ultimately pay 2.4 million yuan in interest to the bank.
This number was frightening.
If she opted for a fixed principal loan over 20 years, the total principal and interest would also be 6.3 million yuan, with less than 2.1 million yuan in interest, a difference of only 300,000 yuan.
However, fixed installment repayment offers a consistent monthly repayment, well-suited for ordinary people with stable incomes; fixed principal repayment, which decreases over time, is more suited for high-income individuals.
