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..