Monthly Pay
$0/mo
Amortization Schedule
| Year | Interest | Principal | Ending Balance |
|---|
Balance vs. Payment Over Time
Balance = remaining loan balance · Interest = cumulative interest paid · Payment = cumulative amount paid.
An Amortization Calculator shows your monthly payment on a fixed-rate loan and a full schedule of how each payment is split between interest and principal. It also shows how an extra monthly payment shortens the loan and cuts total interest. It works for mortgages, car loans, personal loans and business loans.
How to use the amortization calculator
- Enter the loan amount.
- Enter the loan term in years.
- Enter the annual interest rate.
- Choose the loan start date so the schedule shows real months and a payoff date.
- Optionally add an extra monthly payment toward principal.
- Click Calculate to see the monthly payment, total interest, payoff date, the annual and monthly schedules and a chart.
What is amortization?
Amortization means paying off a loan with equal regular payments. Each payment first covers the interest charged that month; the rest reduces the balance. Early on, most of the payment is interest. As the balance falls, more of each payment goes to principal.
Amortization formula
M = P × r(1 + r)^n ÷ ((1 + r)^n − 1)
where M is the monthly payment, P is the loan amount, r is the monthly rate (annual rate ÷ 12) and n is the number of payments. Each month: interest = balance × r, principal = M − interest, new balance = balance − principal.
Example
A $200,000 loan at 6% for 30 years has a payment of $1,199.10 a month. In the first month, $1,000.00 is interest and $199.10 goes to principal. Over 30 years you would pay about $231,676 in interest. Adding $200 a month extra pays the loan off in about 21 years and cuts total interest to about $151,876, a saving of roughly $79,800.
Tips
- Extra payments early in the loan save the most interest.
- Make sure extra payments are applied to principal, not held for future payments.
- Compare a 15-year and a 30-year term: the payment is higher but the interest saving is large.
- Check for prepayment penalties before paying extra.
Frequently Asked Questions
An Amortization Calculator is a free online tool that calculates your monthly loan payments and generates a detailed repayment schedule. It shows how each payment is divided between principal and interest throughout the loan term.
An amortization schedule lists every loan payment from start to finish. It shows the payment amount, interest paid, principal paid, and remaining loan balance after each payment, helping you track your loan repayment progress.
Any fixed-rate loan with equal monthly payments, such as a mortgage, car loan, personal loan or business term loan. It does not handle adjustable-rate or interest-only loans.
Yes. Most lenders allow extra payments toward the principal balance. Making additional payments can reduce your loan term and lower the total interest you pay over the life of the loan. Always check your lender’s prepayment policy before paying extra.
Interest is charged on the remaining balance, which is highest at the start. On a $200,000 loan at 6%, the first month’s interest is $1,000 of a $1,199.10 payment. As the balance falls, the interest portion shrinks and the principal portion grows.
Disclaimer: This calculator gives estimates for general information only. It is not financial, tax or legal advice. Results depend on the numbers you enter and on simplified assumptions, so your actual figures may differ. Check important decisions with a qualified professional or the official source.
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