A concrete example. 100 000 PLN loan over 5 years at 10% nominal. Equal: 2 125 PLN/month for 60 months, total interest about 27 500 PLN. Declining: first payment 2 500 PLN (1 666 principal + 833 interest), last payment 1 680 PLN. Total interest: about 25 500 PLN. Declining is 2 000 PLN cheaper here, because you knock down principal faster and interest runs on a smaller balance.
Why banks push equal. Three reasons. The client fits DTI easier — the bank looks at the first payment, and equal is lower than the initial declining. Sales is simpler: „the same payment every month" sounds safer. Third: the bank earns more, because total interest is higher. On consumer loans (cash loans) you usually get no choice — the bank offers only equal. On mortgages the choice often exists, but you have to ask.
Which one to pick. Declining — if your budget carries the higher first payment (say, 20% higher than the equal). Especially worth it on long mortgages, where the total interest gap runs into tens of thousands of PLN. Equal — if the budget is tight and you value predictability. Also if you expect income to fall (retirement), equal is safer over the whole term.
Frequently asked questions
The first declining payment is usually 15–25% higher than the equal payment on the same loan. The last declining payment is usually 20–30% lower than the equal.
Usually no, unless the contract offers it. You choose at signing and that is it.
At 90% of banks only equal. Cash loans are shorter (up to 10 years) and the cost gap smaller, so the bank offers the simpler model.