How Loan Interest Is Calculated
Published 2026-03-26 · Updated 2026-03-26 · Loanmit Editorial Team
How lenders apply APR to your balance each month on fixed installment loans.
Amortization Basics
On a fixed-rate installment loan, interest for each period is based on the remaining principal. As principal declines, the interest portion of each payment usually declines while the principal portion rises.