Fixed Principal Payment Loan Calculator
What is a fixed principal loan?
Fixed Principal Payment Loan
- A loan characterized by a declining payment.
- Amount allocated to principal is the same for each payment.
- Less total interest than “normal,” level payment loans.
A fixed principal loan is a loan in which the borrower repays a fixed portion of the principal each period until the loan is fully paid. The interest is calculated on the unpaid principal balance, which decreases over time as principal payments are made. A declining periodic payment, caused by the lower interest amount, is a core characteristic of a fixed principal loan.
In contrast, a traditional loan has fixed (sometimes called “level”) periodic payments made up of increasing principal and declining interest. The principal portion increases to keep the total payment the same as the interest portion decreases with the declining principal balance.
- Why are fixed principal loans advantageous to borrowers?
- Fixed principal payment loans reduce the total interest paid because the borrower pays down the principal balance faster than with a traditional loan.
The Calculator-Calculate a Payment Schedule Using a Fixed Principal Amount
Information
Instructions for the fixed principal calculator
Enter the four primary inputs:
- Loan Amount: Enter the total amount of the loan. Enter a positive number.
- Number of Payments: Enter the total number of payments you will make. Enter a positive whole number.
- Annual Interest Rate: Enter the annual interest rate as a percentage. For example, if the rate is 5%, enter “5” in this field.
- Payment Amount: Enter the amount of each payment. Enter a positive number.
The secondary inputs must also be set. If you are unsure about any option, leave it at the default setting.
- Payment Frequency: Select how often you will make payments. Options include monthly, bi-weekly, weekly, and other intervals.
- Compounding: Select how often interest is calculated and added to the balance. If the loan documents do not specify, or if you do not know, set this to the same frequency as the payments.
- Payment Method: Select the payment timing. If the first payment is due when the loan originates, set this option to “Advance.” Otherwise, we assume the first payment is due one period after origination, and you must set this to “Arrears.”
These calculators also support “fixed principal” style loans and are feature-rich. Many allow you to set dates and/or add extra payments.
If you try one of the calculators above, set the “Amortization Method” to “Fixed Principal.”
Fixed Principal Payment Calculator Help
A fixed principal payment loan has a declining payment amount. Unlike a typical loan with a level periodic payment, the principal portion remains the same from payment to payment, while the interest portion declines as the principal balance decreases. As a result, the total payment becomes smaller each period. Over the life of the loan, the borrower pays less total interest with this method.
This calculator can solve for any one of four unknowns: “Amount of Loan,” “Number of Payments” (term), “Annual Interest Rate,” or “Periodic Payment.”
Enter 0 for the value you want the calculator to solve.
The term (duration) of the loan is determined by the “Number of Payments” and the “Payment Frequency.” If payments are monthly and the term is four years, enter 48 for “Number of Payments.” If payments are quarterly and the term is ten years, enter 40 for “Number of Payments.”
For most loans, set the “Payment Method” to “Arrears.” Arrears means the funds are disbursed first, and the initial payment is due one period later.
If the first payment is due on the same day the funds are made available, set “Payment Method” to “Advance.” This is typical for leases.
Tamara says:
Where can I get an amortization schedule for an interest free personal loan with a fixed monthly payment?
Karl says:
You can use this amortization calculator.
Normally, setting one of the 4 main inputs (loan amount, number of payments, interest rate or payment amount) to zero causes the calculator to solve for that input.
In your case, since there’s no interest, the interest rate is 0.0%, and you’ll not want the calculator to solve for a rate.
Therefore, look at the "amortization method" and select "No Interest".(Then you can enter zero for the interest rate.)
Hope this helps.
Greg Brown says:
A start date would be useful. Also, for daily compounding, monthly interest would not be annual interest / 12, but either 30 or 31 days of daily interest, depending on the month (28 for Feb, of course). Thanks.
Karl says:
For different compounding options and the ability to set dates, try this calculator.
NOTE: Set the "Amortization Method" to "Fixed Principal".
Benard says:
How do we set the repayment date to for example 26th of every month?
Karl says:
Use this loan calculator, and under "Amortization Method" select "Fixed Principal." This calculator allows users to set the dates.
Ali Bensaci says:
If I borrow $16,200 by signing a 3-year, 6% note payable and the note payable is repayable in three annual fixed principal payments is my compound monthly or yearly ?
Karl says:
It could be either or neither. The compounding depends on the term of the loan. When in doubt, though, set the compounding equal to the scheduled payment frequency.
Ali Bensaci says:
Also, how can I calculate that with blended principal payments ?
Karl says:
Sorry, I don’t understand this question. How do you calculate what?
Anna says:
I curious how to calculate the fixed principle payment, how can i make the formular myself when using excel
Karl says:
I don’t discuss formulas or equations. If I get into that, there would be no time left to work on this site (I only do this part-time). But, the fixed principal portion is the total principal divided by the number of payments. Then you add the accrued interest. It is probably the simplest of all payment calculations.
Ed says:
In determining the annual interest payments for a 4-year Note with annual fixed principal payments and 2% annual compounding, it appears the interest payment each year is just 2% * outstanding principal. Is this correct? I was thinking it should be 2% * (outstanding principal + previous year’s interest). Thank you.
Karl says:
Assuming that the annual payment including the interest due was paid on time, it is correct that the interest is on the outstanding balance only.
Omar says:
Hi..
First of all, thank you for the effort you put into making those calculators.
I used the “Fixed Principal Payment Calculator” and I got results different from that when I used “Loan Calculator with options”. My goal was to use the “Loan Calculator with options” in order to use the “Extra payments” feature, but before doing so I wanted to make sure that this calculator would give the same results as the “Fixed Principal Payment Calculator”, which was not the case.
– Loan amount = RMB 1,080,000
– Number of payments = 216
– Annual Interest Rate = 5.25%
– Payment Frequency & Compounding = Monthly
– Payment Method = Arrears (Loan)
When using “Fixed Principal Payment Calculator”, I get 1st payment=RMB 9725, and the Total Interest= RMB ¥512,663.04 which are the correct numbers, but when using the “Loan Calculator with options” results are different.
Am I missing something?
Thanks for your help in advance.
Karl says:
Hello, I get exactly the same result with both calculators, and my result matches your results. That’s assuming by loan calculator with options, you mean this calculator.
Did you change any of the dates with the loan calculator? If so, that will change the results. How do you have your interest options set? What are the dates you used, assuming the loan date and first payment date are not exactly one month apart. If the dates are not a month apart, set them so they are, then you’ll see the results match. The loan calculator is accurate enough that if you change the dates, the results change.
Omar says:
Hello Karl, thank you for your kind reply.
your reference to the loan calculator with options is correct.
I just tried it again and it’s ok now. I think I know what my mistake was. I should have set “payment amount” to zero BEFORE pressing “calc”.
Thank you once again..
Karl says:
Good to hear! Thanks for letting me know.
Lee says:
The changes to this website have really dragged down the functionality. I can no longer run an amortization schedule and bump in extra payments to that schedule. I don’t see where I can do this among the breakout of calculators. I am unable to input any mortgage terms for some of the calculators to even run them so I no longer find this website useful. It’s a shame that when something works as the original website had, someone feels duty bound to tweak into dysfunctional oblivion.
Karl says:
I’m sorry you are having problems with the updated site. However, there should be no issues. You should be able to do what you did on the prior site.
However, you didn’t give me any specifics, so it’s hard for me to say why you are experiencing problems.
I will point out that it is possible that setting from prior visits are being carried over in your case from the old site. This should not happen. If you experience a problem with a calculator page, please do a hard refresh (see additional note at the end of this comment).
Please let me know specifics if you have an issue after a HARD refresh of the page.
(Sites have to change, otherwise, browser technology changes and sites will eventually stop working. With the last update, I tried to get ahead of the curve.)
Hard reset:
If you do not see the change right away, you may have to perform a hard refresh of the page:
Depending on your operating system all you need to do is the following key combination:
Above, from Refresh Your Cache.
Karl says:
As far as creating an amortization schedule with extra payments, is this the calculator you are looking for:
Extra Payment Calculator
The calculators themselves did not change between the old site and the new site. You can get to any of the calculators you were using on the old site on this new site by changing financial-calculators.com to accuratecalculators.com followed by the same calculator.
Ankan says:
how can i copy the schedule to an excel sheet?
Karl says:
The ability to select and copy a schedule is only available to subscribers.
Also, so you know, copying and pasting to a spreadsheet can be a hit or miss feature, depending on the operating system, browser and spreadsheet, results vary.
alaberge says:
*Loan date 12/1/25. Loan amount $150,000. Maturity date 12/31/28. Interest 3.66%.
*Interest only is due 12/31/26. (I think I have this w/interest-only calculator.)
*Starting 1/1/27, $10,000 will be due each quarter from 4/1/27 thru 10/1/28. Balloon then due 12/31/28. I have no idea what calculator(s) to use to illustrate this. Any help would be appreciated. Thank you.
Karl says:
You’ll be able to do the calculation with the Ultimate Financial Calculator.
Enter the 3.66% as the initial interest rate.
First row enter the loan date and loan amount and set series to Loan.
Next row enter 12/31/26 as the date and create an interest-only series. Enter 1 under number.
Next row enter 01/01/27 for date. 10,000 for amount, and quarterly for the frequency. 8 (I think) under number. I think you are saying there are going to be 8 quarterly payments.
Final row, enter unknown for the amount and 12/31/28 for the date.
Click calculate.
I don’t think I missed any steps, but let me know if you have a question.
Karl says:
Also, I should point out, that’s basically how you do the calculation. You’ll want to review other options perhaps, such as days-per-year and other interest settings.