Question 1

What is Equal Payment (Fixed Monthly)?

Accepted Answer

Equal payment means your monthly payment stays the same throughout the loan term. More interest is paid in the early years, and more principal is paid later.

Question 2

What is Equal Principal (Declining Payment)?

Accepted Answer

Equal principal means you pay the same amount of principal each month, plus interest on the remaining balance. Total interest is lower but early payments are higher.

Question 3

Which repayment method is better?

Accepted Answer

Equal payment is better if you prefer predictable monthly payments. Equal principal is better if you want to pay less interest overall and can afford higher early payments.

Question 4

How is monthly payment calculated?

Accepted Answer

For equal payment: M = P × r × (1+r)^n / ((1+r)^n - 1). For equal principal: Monthly payment = (P/n) + (P - (P/n) × (k-1)) × r.

Question 5

Can I pay off my loan early?

Accepted Answer

Yes, most loans allow early repayment which can save you significant interest. Use our V2 calculator to estimate savings from early payments.