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Installment Plan Calculator

See the monthly payment on any installment plan.

How it is calculated

The tool first subtracts the down payment from the price to get the financed amount: financed = price − down payment. With a monthly rate i = annual rate ÷ 100 ÷ 12, the equal monthly payment is payment = financed × i ÷ (1 − (1 + i)−months). When the rate is 0 the payment is just financed ÷ months. Total cost is down payment + payment × months, so it includes the deposit and all the interest. Interest is charged monthly on the remaining balance and the first payment comes one month after purchase. Amounts are in dollars. The tool does not add fees, insurance, or a different promotional rate. Months must be a whole number above zero, and every field must be filled in; enter 0 for no down payment or no interest. A down payment larger than the price, a negative rate or a fractional number of months shows no result.

Worked example

You buy something for 1200, pay 200 down, and finance the rest over 12 months at 12% a year. Step 1: financed amount = 1200 − 200 = $1,000.00. Step 2: monthly rate = 12 ÷ 100 ÷ 12 = 0.01. Step 3: payment = 1000 × 0.01 ÷ (1 − 1.01−12) = $88.85 a month. Step 4: total cost = 200 + 88.85 × 12 = $1,266.19, so the financing adds about $66.19 on top of the 1200 price. With 0% interest the payment would be $83.33.

Try this example →

Common mistakes

  • Entering the financed amount as the price. The tool subtracts the down payment itself, so entering the already reduced price counts the deposit twice.
  • Typing the rate as a monthly percentage. The field is an annual rate, and 1 would mean 1% a year, not 1% a month.
  • Confusing a flat-rate offer with this calculation. Some stores quote a flat rate on the original amount, which costs more than the same percentage on a declining balance.
  • Entering a down payment larger than the price, or a term like 12.5 months. Both give no result; use whole months and a deposit at or below the price.
  • Comparing only the monthly payment between plans. Compare the total cost line, since a longer plan with a smaller payment can cost far more overall.

About this calculator

An installment plan splits the cost of a purchase into a series of equal payments over time, either interest-free — common in retail "buy now, pay later" offers — or with interest added, in which case the payment is calculated with the standard amortizing loan formula so that principal and interest are spread evenly across the term.

The key difference between an installment plan and a general-purpose loan is that it is typically tied to a specific purchase and offered at the point of sale, often by the retailer or a third-party financing partner rather than a bank, and it may carry promotional 0% interest for a limited window before a standard rate applies. This calculator works out the monthly payment for an installment purchase, with or without interest, from the price, term, and rate you specify.

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