How do you calculate the cash loan installment?

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Cash loan is absolutely one of the most popular banking products. It happens that we need a small amount to buy a new fridge, finance a holiday trip or sew on a household budget. Then we usually ask ourselves: what will the loan installment be? What determines its height? How to calculate decreasing installments, and how equal installments? Convert the loan installment with us!

Calculate your cash loan installment: these factors matter!

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Calculating loan installments is a difficult task. There are several things that can affect how high your cash loan installment will be, including:

  • number of installments: the more they are, the smaller the installment will be, assuming that the loan size is the same
  • type of installments: equal or decreasing installments (equal installments are the most popular)
  • interest rate
  • the nature of the interest rate: fixed or variable (variable interest entails the risk that the loan installment, if the interest rate increases, is able to increase when the debt is settled)
  • the amount for which we take out a loan
  • amount and manner of settling the commission: the commission can be included in the total loan amount or added to this sum

Calculating loan installments in Excel

Calculating loan installments in Excel

We already know what matters when it comes to calculating the installment of a cash loan, and how to do it in practice? If you intend to take a regulated loan in equal installments, with a fixed interest rate, and the required commission is added to the sum of this liability, the conversion of loan installments is possible using the PMT function contained in Excel.

Calculate the cash loan installment using the cash loan calculator

Calculate the cash loan installment using the cash loan calculator

Asking yourself: what installments will I pay, we can also use special cash loan calculators, which will approximate for us the amount of the loan installment with the parameters entered by the user and present a simulation of loan installments. However, it should be noted that calculating loan installments using a similar tool is hypothetical.

SUMMARY: the amount of the monthly loan installment will be determined by a number of factors. We often face the question: how to calculate the installment of a housing loan, cash loan etc. depending on the loan we want to take. Calculating installments is a bank’s task, therefore any questions about their amount should be directed to specialists.


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