- Enter your loan amount (principal)
- Enter the annual interest rate as a percentage
- Enter the loan term in years or months
- Select your preferred repayment method
- Click 'Calculate' to see your results
- Review the repayment schedule for detailed breakdown
What is the difference between Equal Payment and Equal Principal?
Equal Payment (amortization) means you pay the same total amount each month, but the proportion of principal and interest changes over time. Early payments are mostly interest, while later payments are mostly principal. Equal Principal means you pay a fixed amount of principal each month plus the interest on the remaining balance, so your total monthly payment decreases over time.
Which repayment method saves more on interest?
Equal Principal typically results in less total interest paid because you're paying down the principal faster. However, it requires higher payments in the early months. Equal Payment has lower initial payments but results in more total interest over the life of the loan.
How is the monthly payment calculated for Equal Payment?
The formula is: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is monthly payment, P is principal, r is monthly interest rate (annual rate / 12), and n is total number of payments. This ensures each payment is the same amount.
Can I use this calculator for mortgages?
Yes! This calculator works for any type of loan including mortgages, car loans, personal loans, student loans, and business loans. Just enter your loan amount, interest rate, and term to get accurate payment estimates.