Equal Principal Payment Calculator

Equal Principal Payment is is a repayment method that pays a fixed amount of principal each month plus the interest accrued. The principal portion of each payment stays constant.

During the repayment period you pay a fixed amount each month: part repays the principal and the rest covers interest on the outstanding balance. With equal principal repayment, interest is heavier at first and the principal portion grows over time.

This method has higher interest costs at first, but the total interest paid is lower, so it is recommended if you can afford the early burden.

Result

Total paid:0.0 , Total interest:0.0

About This Calculator

An equal principal (principal-reducing) loan repays the same fixed slice of principal every period, with interest recalculated on the declining balance. Because interest falls along with the balance, the total monthly payment starts high and decreases steadily.

Enter the loan amount, annual rate and term to see each period's payment, the split between principal and interest, and the total interest you will pay.

Equal-principal repayment keeps the principal instalment fixed and lets interest shrink with the balance, so payments start high and fall every month. On a 300,000,000 loan at 4 % over 30 years the first payment is about 1,833,000 and the last about 835,000, and total interest comes out lower than with equal total payments.

Key Formula:Principal per period = P / n ; Interest per period = Remaining balance × monthly rate

Frequently Asked Questions

Is an equal principal loan cheaper than an equal payment loan?

You pay less total interest because the balance drops faster, but the first payments are noticeably higher. It suits borrowers with strong early cash flow who want to minimize interest.

Why does the payment change every month?

The principal portion is fixed, but the interest portion is charged on the remaining balance. As the balance shrinks, the interest charge shrinks with it, so the total payment drops each period.

Why is total interest lower than with equal payments?

The balance falls faster in the early years because more principal is repaid from the start. Interest is charged on the outstanding balance, so repaying sooner directly reduces the interest charged over the life of the loan.

Who suits equal-principal repayment?

Borrowers with high current income who expect it to decline, or who want the lowest total interest. The early burden is real: the opening payment can be 30–40 % higher than an equal-payment loan of the same size and rate.

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Sources & last update

2026-10-19