How to Calculate Number of Loan Payments

The number of payments necessary to repay a loan is not based on the amount of the loan or the interest rate. It is based only on the term of the loan. The first payment of a loan is calculated by lending institutions using a complex formula. That value is the value that is paid throughout the term of the loan. The only difference in each payment is that the ratio of interest to principal changes as the unpaid balance is reduced.

Things You'll Need

• Loan term
• Payment interval
• Calculator (optional)

Instructions

1. Identify your payment schedule. Most loans are repaid monthly, but some, especially certain mortgages, are repaid bimonthly or biweekly. Other options, such as weekly or quarterly, may also apply.

2. Determine the number of payments that will be made in a year. Loans with monthly payments have 12 payments per year, while loans with biweekly payments will have 26 payments per year. Even if the term of your loan is less than a year, calculate the number of payments for a full year.

3. Multiply the term of the loan by the number of payments per year to get the total number of payments. If the term of the loan is expressed in months, divide it by 12 to convert it to years before multiplying. For instance, six months would be 0.5 years and 21 months would be 1.75 years.