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Five core repayment methods

• Equal installmentThe total periodic payment stays relatively stable while the principal share rises over time.
• Equal principalThe same principal is repaid each period while interest and total payments decline with the balance.
• Interest firstInterest is paid as agreed before the principal is repaid at maturity.
• Flat-rate installmentTotal interest is calculated from the original principal and distributed across the periods.
• Lump-sum repaymentPrincipal and agreed interest are repaid together at maturity.

Use the repayment method stated in the contract. When comparing options, review cash-flow timing, fees, total interest, and the effective annual rate instead of comparing nominal rates alone.

Core formula examples

Equal installment payment

$$\text{Payment} = \frac{P r (1 + r)^n}{(1 + r)^n - 1}$$

Equal principal components

$$\text{Principal per period} = \frac{P}{n},\qquad \text{Interest}_t = B_{t-1} r$$

Variable definitions

$P$

The loan principal, or original amount borrowed.

$r$

The rate per payment period. In a simplified monthly nominal-rate example, $r = r_{\text{annual}} / 12$.

$n$

The total number of repayment periods.

$B_{t-1}$

The outstanding principal before payment period $t$.

Settlement uses banker’s rounding, HALF_EVEN, by default. Contracts that specify another rounding policy should be recalculated with that policy.

Equal installment worked example

Assume CNY 100,000 principal, a 12-month term, a 4.20% nominal annual rate, monthly payments, and no fees, prepayments, or other events. This simplified example divides the annual rate by 12.

Monthly rate

0.35%

Theoretical monthly payment

CNY 8,524.13

Theoretical total repayment

CNY 102,289.57

Theoretical total interest

CNY 2,289.57

The example totals the unrounded theoretical payment before displaying cents. A period-by-period schedule can adjust the final payment by one cent to reconcile rounding.

Maintenance, version, and public rate source

These facts identify the page and calculation-engine maintenance state, while separately attributing the external source used by public rate presets.

Maintainer

WeFreeStar

Page content updated

2026-07-26

Calculation engine version

1.9.0

Public rate dataset version

cfets-lpr-2026-07-20

Source publication date

2026-07-20

Retrieved by WeFreeStar

2026-07-26

Public rate source:National Interbank Funding Center LPR announcement (2026-07-20)

The source supports only the public China LPR preset values on this page. It is not a loan quote and does not endorse this site’s formulas or results. Manually entered rates do not use the dataset; the actual contract remains authoritative.

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