Loan Amortization Calculator
Calculate loan amortization schedule
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Payment per period
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Total interest
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Total paid
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Understanding Loan Amortization
Loan amortization is the process of paying off a loan through regular, equal payments over time. Each payment covers both the loan principal and the interest charged on the outstanding balance.
How It Works
When you make a loan payment:
- Early payments: Most of your payment goes toward interest
- Later payments: More of your payment goes toward the principal
- Final payment: Nearly all principal, minimal interest
This happens because interest is calculated on the remaining balance, which decreases with each payment.
Why Use This Calculator?
Understanding your amortization schedule helps you:
- See the total cost of your loan including all interest paid
- Plan extra payments to pay off the loan faster and save on interest
- Compare different loan options to find the best deal
- Budget accurately by knowing your exact monthly payment
- Build equity faster by understanding how payments reduce your balance
Key Terms
- Principal: The amount you borrow
- Interest Rate: The annual percentage charged on your loan balance
- Term: The length of time to repay the loan
- Amortization Schedule: A table showing each payment's breakdown
Tips for Saving Money
- Make extra payments toward principal when possible
- Pay bi-weekly instead of monthly to make an extra payment per year
- Round up your payments to reduce principal faster
- Refinance if rates drop significantly
Use this calculator to see exactly how your loan payments break down and plan your path to becoming debt-free.