What Is a Loan Installment?
Definition
Loan Installment: The amount paid each period to repay a loan. In an equal-installment loan it is the same every month and holds principal, interest and any taxes charged on the interest.
A loan installment is the amount you pay the bank each month to repay a loan. Consumer loans usually have equal installments. Each one holds some principal, that month’s interest and any taxes charged on the interest. The interest share is largest in the first installments and shrinks over the term. Loan amount, rate and term set it.
Where it appears in the formulas
A = P × i / (1 − (1 + i)^(−n)), where P is the loan amount, n the term in months and i the monthly rate with any taxes on the interest. The loan calculator uses this formula.
In Türkiye
Turkish consumer loans carry KKDF and BSMV on the interest, so the monthly rate with taxes is i = r × (1 + KKDF + BSMV), with r the contractual rate. The loan calculator rounds every line to the kuruş, so the last installment can differ by a few kuruş.