Calculate loans with a fixed principal payment structure where interest payments decrease over time

If we compare the calculation of loan amounts with fixed principal amount and loan with annuity scheme of repayment at one interest rate, amount and term, we'll see that total payment amounts for these schemes are different. The payment schedule shows that, unlike the constant monthly amount in an annuity loan, the payment amounts on a loan with a fixed principal payment decrease from month to month. This is because the fixed principal loan is calculated by dividing the entire loan amount into equal parts, the number of which is equal to the periods specified in the loan agreement. To this amount is added interest, which is accrued on the amount of the unpaid balance of the loan. Gradually, this balance decreases and the interest decreases accordingly, so the total amount of payments becomes smaller.

Application of the method of calculation of the loan with a fixed principal payment amount in the mortgage calculator

This calculator calculates a loan with a fixed principal payment. The calculator calculates the total amount that will be returned to the lender, and also separately calculates the amount of interest paid for using the loan. The amortization table will provide a detailed monthly calculation of loan payments. Compare which loan scheme will be beneficial for you - repayment of a loan with a fixed principal payment or a regular annuity loan.