Compare equal payment, equal principal, interest-only and graduated repayment. Enter your loan amount, term and interest rate to see the full schedule.
| No. | Principal | Interest | Payment | Balance |
|---|
Every instalment is identical. Because interest is charged on the outstanding balance, the first payments are mostly interest and only a small slice goes to principal. As the balance falls, that ratio flips and principal repayment accelerates.
This is the standard structure for mortgages, car loans and most personal loans. Its main advantage is predictability: the same amount leaves your account every month for the entire term, which makes budgeting straightforward.
You repay the same amount of principal each period, and interest is calculated on whatever balance remains. Since the balance shrinks steadily, the interest portion falls every month and so does your total payment.
The first instalments are noticeably higher than under equal payment, but you pay less interest overall because the balance drops faster. Worth considering if you can absorb a heavier start.
During the term you pay interest alone, and the entire principal falls due as a single balloon payment at maturity. Monthly outgoings are the lowest of the four methods, but the balance never decreases, so total interest is the highest.
Common in bridging finance and some commercial lending. It only makes sense when you have a clear plan for the lump sum at the end — a property sale, a maturing investment or a refinance.
The principal portion starts at zero and increases by a fixed step each period, so early instalments are small and later ones are large. The calculator uses an arithmetic progression where the principal in period k equals d × (k − 1), with d chosen so the amounts sum exactly to the loan.
Designed for borrowers who expect their income to rise, such as early-career professionals. The trade-off is more total interest, because the balance stays high for longer.
The monthly rate is the annual nominal rate divided by twelve. Interest for each period is that rate applied to the balance still outstanding, which is why paying down principal faster reduces every subsequent interest charge.
For the equal payment method the instalment comes from the standard annuity formula, where P is the principal, r the monthly rate and n the number of periods:
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1)
The other three methods derive the principal portion first and add interest on the remaining balance. Totals in the summary are computed from unrounded figures, so they will not always match the sum of the rounded values shown in the table to the last unit.
Run the same loan through all four tabs and the difference in total interest is usually the most revealing number. On a long term at a moderate rate, the gap between equal principal and interest-only can amount to a substantial share of the original loan.
A few things this calculator deliberately leaves out, because they vary by lender and country:
Treat the output as a comparison tool for repayment structures rather than a binding quotation. Your lender's offer document remains the authoritative figure.
Equal principal, in almost every case. It reduces the outstanding balance fastest, and interest is always charged on that balance. Interest-only is the most expensive for the same reason in reverse.
No. It only changes how figures are formatted — the symbol, digit grouping and number of decimal places. No exchange rate is applied, so enter the amount in the currency you actually borrowed.
Yes, and it is worth doing. Shortening the term raises each instalment but cuts total interest sharply, because the balance is outstanding for fewer periods. Try 240 months against 360 to see the effect.
No. All arithmetic runs in your browser and nothing is transmitted to a server or saved. Reloading the page clears every field.