Result
First payment
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
In a differentiated schedule, the principal is repaid in equal chunks every month: the constant part = loan amount ÷ term in months. Interest each month is calculated on the balance remaining at the start of that month, so it shrinks along with it — the total payment (principal + interest) gets smaller over time.
The first payment is the largest: the balance is still full, so the interest on it is at its maximum. The last payment is the smallest, made up almost entirely of principal. The gap between the first and last payment can be substantial, especially at a high rate or a long term.
Total interest paid over the full term is usually lower under a differentiated schedule than an annuity, because the balance shrinks faster in the early months and interest accrues on a smaller balance sooner. The trade-off is a heavier financial load at the start: the borrower needs more income available up front, rather than having the burden spread evenly the way an annuity does.