PMT Formula — Calculate Loan Payments in Excel & Sheets (Free Tool)
Calculates the payment for a loan based on constant payments and a constant interest rate.
Common Errors & Fixes
Payment seems too high or too low
Causes:- Annual rate not converted to monthly rate.
- Number of payments not matching the rate period.
Fixes:- Convert annual rate: rate/12 for monthly payments.
- Match nper to rate: 12 months × years for monthly payments, or use 12 for 12 monthly payments.
Frequently Asked Questions
What does PMT calculate?
PMT calculates the constant periodic payment for a loan, such as the monthly payment for a mortgage or car loan.
How do I convert an annual rate to a monthly rate for PMT?
Divide the annual rate by 12. For example, 6% annual becomes 6%/12. Also multiply the number of years by 12 for the nper.
Why is the PMT result negative?
PMT returns a negative number by convention because it represents an outgoing payment (cash outflow). To get a positive result, use -PMT(...) or negate the loan amount.
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