# Fixed Principal Payment Loan Calculator

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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.

## Richard Beinhauer says:

Hello,

I’m looking to see the effects of extra principle payments on a fixed principle loan. Basically would like to see the effects of paying extra principle every week. I’m having trouble finding the correct calculator for this. Could you please guide me to the correct calculator?

Thanks,

Rich

## Karl says:

This calculator will do what you need.

It’s a bit involved, due to all the options/features, but scroll down the page for some tutorials.

Feel free to ask questions as well.

## Chandrasekhar K says:

Hello ,

Can we specify the first payment date in this calculator .. so that the payment schedule can be generated and kept for reference will be replica of what is in real.

Thanks & Regards,

Chandra

## Karl says:

No you can’t. Not with this calculator.

However, you can with this amortization schedule calculator.

Just set the "Amortization Method" option to "Fixed Principal."

## john says:

Hi,

I’m curious how I would figure out annual ROI for a deal like this:

$1,000 my investment.

$1,200 my total return during 42 days on a payment plan. (6 weeks)

Paid to me weekly in equal installments of $200 each.

No interest charged.

This would be easy to figure out if all the money was due back in one lump sum at the end of the 6 weeks but since I collect some of the money every 2 weeks I’m returning it at a faster overall rate and I don’t know what I need to use to calculate that. Any help is appreciated.

## Karl says:

It’s still easy with the right calculator. 🙂

See the Internal Rate of Return Calculator. This calculates an annualized ROI from a regular or irregular cash flow.

Once you check it out, if you have any questions just ask. Let me know how you make out using it.

## john says:

Okay Thanks. I’m checking it out now. I don’t see where to enter the expected amount of $1,200 or the number of payments or end date.

## Karl says:

As I understood you, the $1,200 is not a single amount but a series of repayments of $200 each, right?

If that’s the case, enter your initial investment which is $1,000 as a negative value and follow that by 6 $200 positive amounts (you’re being repaid) on the dates they are paid or expected. The last date is the date of the last cash flow. Zeros have no impact on the result.

If you have other questions pertaining to a particular calculator, please keep them on the page for the calculator so that others can follow along. Thanks!

## John says:

Thanks Karl. That makes sense. I got that working now but I actually need the ROI and not the IRR I think. Is there a way to convert or do I need a different calc?

## Karl says:

An IRR is an annualized ROI. In your original question, you had mentioned "annual ROI".

If you don’t want an annualized ROI, then the calculator calculates the gross return as well (the ROI). Personally, the annualized number makes more sense to me because when the ROR (rate-of-return) is annualized, it allows an investor to compare the results of different investments that have different time frames.

## Werther Caballero says:

Can I change the interest at any time in the loan schedule?

(variable rate)

## Karl says:

Not with this calculator, but with the Ultimate Financial Calculator you can. You’ll be able to change the interest rate as of any date you desire.

Scroll down the page to the tutorials. There’s a couple about adjustable rates.

Also, there’s this one, Calculate PV of Fixed Principal + Interest Loan, to show you how to set the calculator to fixed principal.

## 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.