Knowing how to calculate a monthly payment for a fixed-rate installment loan helps you compare offers and plan your budget. The payment depends on three inputs: loan principal, annual interest rate (converted to a monthly rate), and the number of monthly payments. For fixed-rate loans the standard amortizing formula produces a constant monthly payment that blends interest and principal so the balance reaches zero at term end. Lenders provide amortization tables, but it’s useful to mentally check whether a quoted payment is reasonable. In the example below you’ll compute the monthly payment for a common small personal loan scenario so you can spot unexpectedly high or low offers.