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## Fixed principal payment calculator help...

A fixed principal payment loan has a declining payment amount. That is, unlike a typical loan, which has a level periodic payment amount, the principal portion of the payment is the same payment to payment, and the interest portion of the payment is less each period due to the declining principal balance. Thus the payment amount declines from one period to the next. Ultimately, the borrower will pay less in interest charges with this loan method.

This calculator will solve for any one of four possible unknowns: "Amount of Loan," "Number of Payments" (term), "Annual Interest Rate" or the "Periodic Payment."

Enter a '0' (zero) for one unknown value.

The term (duration) of the loan is a function of the "Number of Payments" and the "Payment Frequency." If the loan is calling for monthly payments and the term is four years, then enter 48 for the "Number of Payments." If the payments are made quarterly, and the term is ten years, then enter 40 for the "Number of Payments."

Normally you would set the "Payment Method" to "Arrears" for a loan. Arrears means that the monies are lent on one day, and the first payment isn't due until one period after the funds are received.

If the first payment is due on the day the funds are available, then 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".

## 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.