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Serial Loan Calculator

Work out the payments on a serial loan with equal principal payments – first and last payment, total interest and how it compares with an annuity loan.

Nominal yearly interest rate.

A fixed fee added to every payment, if your lender charges one. Enter 0 if none.

An estimate with a fixed interest rate for the whole term. Real rates change, and banks may round or date payments differently. General information, not financial advice.

About this tool

A serial loan is paid down by the same principal amount every time, so the interest – and the total payment – falls as the balance shrinks. Enter the loan amount, interest rate, term and how often you pay to see the first and last payment, the principal per payment, what you pay in the first year, the total interest and the total cost. The calculator also shows what the same loan would cost as an annuity loan with equal payments.

Frequently asked questions

A serial loan is repaid with the same principal amount every period, and you pay interest on the balance that is left. The payments are therefore highest at the start and fall over time. Borrowing 100,000 at 6% over 5 years with yearly payments gives a principal of 20,000 a year, a first payment of 26,000 (20,000 + 6,000 interest) and a last payment of 21,200, with 18,000 in interest in total.

Yes, at the same rate and term, because the balance falls faster, so you pay interest on less money. In the example above an annuity loan costs 23,739.64 a year and 18,698.20 in interest – 698.20 more. On 200,000 at 6% over 20 years with monthly payments the difference is bigger: 120,500 in interest on a serial loan against 143,886.91 on an annuity loan.

Multiply the interest rate per payment by the loan amount and by (number of payments + 1) ÷ 2. The balance falls in a straight line, so on average you owe a little over half the loan. For 200,000 at 6% with 240 monthly payments: 0.005 × 200,000 × 241 ÷ 2 = 120,500.

Because the first payments are lower and every payment is the same while the rate stays fixed, which makes budgeting easier. On 200,000 at 6% over 20 years the first serial payment is 1,833.33 a month against 1,432.86 for an annuity loan. The serial payment drops below the annuity payment after about 8 years (payment 98), and the last one is just 837.50.

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