what is a loan constant 
a loan constant is a percentage that shows the annual debt service on a loan compared to its total principal value the calculation for a loan constant is the annual debt service divided by the total loan amount when shopping for a loan borrowers can compare the loan constant of various loans before making a decision the loan with the lowest loan constant will have lower debt service requirements meaning the borrower will pay less in interest and principal over a given period loan constants are only applicable to fixed interest rate loans and not loans with variable interest rates 