# Installment plan calculator

> An installment plan splits a purchase into equal payments, sometimes with interest and sometimes with fees. A $1,200 item with $200 down and the rest financed at an example 18% APR over 12 months costs $91.68 a month, or $1,300.16 in all. A $400 buy now, pay later plan of $100 now plus three $105 payments carries an effective APR near 29.76%.

Source: https://www.calterix.com/en-us/simulator/installment-plan/ · Updated 11/06/2026 · en-US

## How installment plans work

A plan splits the price into equal payments. Some charge interest like a loan. Some are 0% but add fees. Some give a discount if you pay cash. In every case, the question is what you pay beyond the cash price, and how that compares with the money you could earn while you hold on to your cash.

```
Amount financed = price − paid up front
Payment = financed × r ÷ (1 − (1 + r)^−months), with r = APR ÷ 12
Total cost = paid up front + fees + payment × months
```
Example: $1,000 financed at 18% for 12 months. r = 0.015, so the payment is $91.68.

The same math drives a [personal loan](https://www.calterix.com/en-us/simulator/loan/) and a [credit card payoff](https://www.calterix.com/en-us/simulator/credit-card-payoff/). For a long list of payments, see the [amortization schedule calculator](https://www.calterix.com/en-us/simulator/amortization/).

## Payment by APR

| APR | Monthly payment | Extra cost |
| --- | --- | --- |
| 0% | $83.33 | $0.00 |
| 9.99% | $87.91 | $54.93 |
| 15% | $90.26 | $83.10 |
| 18% | $91.68 | $100.16 |
| 24% | $94.56 | $134.72 |
| 29.99% | $97.48 | $169.79 |

$1,000 financed over 12 months. Rates are examples.

## Buy now, pay later plans

Pay-in-4 plans and similar offers often say 0% interest, but the real cost depends on fees. Treat any fee as part of the price: pay it up front in the calculator and read the effective APR.

Example: a $400 item split into $100 now and three payments of $105 costs $415. The plan funds $300 of the price, so the extra $15 works out to an effective APR of about 29.76%. A plan with no fee shows 0%.

> Terms differ by company. Look for late fees, deferred interest that is charged if the balance is not cleared by a date, and whether the plan is reported to credit bureaus.

## Cash or plan

Paying later is worth something only if your money can earn a return while you wait. The Cash or plan tab turns later payments into today's dollars at the return you enter.

| Return on your money | Worth of 12 × $95 today | Versus $1,000 cash |
| --- | --- | --- |
| 0% | $1,140.00 | Cash saves $140.00 |
| 3% | $1,121.93 | Cash saves $121.93 |
| 5% | $1,110.38 | Cash saves $110.38 |
| 8% | $1,093.72 | Cash saves $93.72 |

The plan costs 12 payments of $95. Higher returns shrink the gap but do not close it.

With a $1,200 cash price instead, the same plan wins by $89.62 at a 5% return, since the plan costs $1,110.38 in today's dollars.

## Common mistakes

- Looking only at the monthly payment, not the total.
- Ignoring fees, which can raise the real APR a lot on a short plan.
- Assuming 0% means free. Read the terms for deferred interest and late fees.
- Stacking many small plans. Each payment looks small, but the total can strain a budget.

## Frequently asked questions

### How do I calculate monthly installment payments?

Subtract what you pay up front, then apply the loan formula with the APR and the number of months. $1,000 financed at 18% for 12 months is $91.68 a month.

### Is it cheaper to pay cash or in installments?

Compare the cash price with the plan's payments valued in today's dollars. If the plan has no discount for paying later and you pay cash, cash usually wins. The Cash or plan tab runs the numbers.

### How do I find the interest rate of an installment plan?

Use the Real APR tab with the price, any amount paid up front, and the payment. $95 a month for 12 months on a $1,000 item works out to an APR of about 24.91%.

### Are buy now, pay later plans really 0%?

Many charge no interest but add fees or penalties. Enter any fee as an up-front fee in the calculator to see the effective APR. A $400 item paid as $100 now and three $105 payments is about 29.76% APR.

### What is the difference between APR and total cost?

APR is the yearly cost of borrowing as a rate. Total cost is the dollars you pay in all. A short plan can have a high APR but a small extra cost in dollars, so check both.