Types of Loan Payment
There are two ways to do loan payment.
◆Equal Monthly Payments with Interests
Payment every month is the same amount.
It is easy to make a payment schedule since the payment is always the same.
On the other hand, total of loan interest would be bigger than principal equal monthly payment.
◆Principal Equal Monthly Payment
This is the total of same payment towards the principal and payment towards interest.
For some banks, they only deal with Equal Monthly Payments with Interests.
In the first couple of years, interest payment takes a big part since the principal is still big.
Comparing to Equal Monthly Payments with Interests, interest payment is smaller.