Equal payment vs equal principal: which costs less
The interest gap between the two methods, worked out on a real loan.
Personal · Auto · Consumer loans
The real cost of your loan
See your monthly payment, total interest and full payout schedule before you sign. Compare repayment methods and see exactly what an extra payment saves.
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Monthly payment
—Total principal
—Total interest
—Total paid
Repayment method comparison
Equal payment
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total interest —
Equal principal
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total interest —
Extra-payment savings
—Interest saved
—Time shortened
—Months to payoff
Amortization schedule
| # | Payment | Principal | Interest | Ending balance |
|---|
Estimate only — actual payments vary with lender fees, compounding and your credit terms. This is not loan approval.
Know before you sign
Two ways to repay, very different interest
Equal-payment loans keep your bill steady but front-load interest. Equal-principal loans start higher and shrink to almost nothing. The right pick depends on your cash flow — and an extra payment can cut years off either.
- Amount, rate, term set the baseline.
- Pick a method and watch the interest change.
- Add an extra payment to see months drop off.
- Export the CSV to keep your own record.
Loan questions
How is a loan monthly payment calculated?
With the amortization formula: payment = amount × monthly rate ÷ (1 − (1 + monthly rate)^−months). Interest is charged on the remaining balance, so each payment covers that month's interest plus a principal slice.
Equal payment vs equal principal — what's the difference?
Equal payment keeps every monthly bill the same (easier budgeting, more total interest). Equal principal repays an identical chunk of principal monthly, so payments start high and shrink — costing less interest overall.
Does an extra payment actually lower interest?
Yes. Extra principal shrinks the balance, and less balance means less interest on every future month. Even a modest extra $50–100 a month typically shortens the loan by months and saves hundreds to thousands in interest.
Can I pay off a loan early without penalty?
Many personal loans are open to prepayment penalty-free, but some lenders or auto loans charge prepayment penalties. Check your agreement — our calculator models the benefit; only your lender can confirm the cost.