Loan Amortization Calculator

Calculate your loan payments and view the complete amortization schedule with interest vs principal breakdown.

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Understanding Amortization

Loan amortization is the process of paying off a loan through regular payments that cover both principal and interest.

Key Benefits

  • Principal vs Interest: See exactly how much goes to principal vs interest
  • Extra Payments: Understand the impact of extra payments
  • Payoff Strategy: Plan your loan payoff strategy
  • Compare Scenarios: Compare different loan scenarios

How to Use

  • Step 1: Enter your loan details
  • Step 2: Adjust interest rate and term
  • Step 3: Add extra payments to see impact
  • Step 4: View the complete payment schedule

Amortization Formula

Monthly Payment = P × [r(1+r)ⁿ] / [(1+r)ⁿ-1]

Where: P = Principal, r = Monthly interest rate, n = Total number of payments

Loan Summary

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Amortization Schedule

Payment # Date Payment Principal Interest Balance

Frequently Asked Questions (FAQ)

What is Loan Amortization? ▼

Amortization is the process of paying off a debt over time with regular payments. Each payment covers the interest due for that period, and the remainder reduces the principal balance.

Why is my interest payment so high at the beginning? ▼

Interest is calculated based on your remaining loan balance. At the start of the loan, your balance is highest, so the interest portion of your payment is maximized. As you pay down the principal, the interest charge decreases.

Do extra payments really save money? ▼

Yes, significantly. Extra payments go 100% towards the principal balance (after current interest is paid). This lowers the balance for future interest calculations, shortening the loan term and saving you thousands in total interest.