Front-Loaded Interest
When you start making payments, your balance is high. Because interest is calculated as a percentage of your remaining balance, most of your early payments go strictly toward paying the bank's interest, not the principal.
Loan Amortization Calculator
See exactly where your money goes. Build your amortization schedule and discover how extra payments can save you thousands in interest.
Amortization Schedule Calculator
$0
Time to Payoff
30 yrs
Total Interest
$0
Total Amount Paid (Principal + Interest)
$0
Yearly Amortization Schedule
| Year | Interest Paid | Principal Paid | Ending Balance |
|---|
How Amortization Works
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Build My Payoff Strategy arrow_forwardThe Power of Extra Payments
Any extra money you pay goes 100% toward the principal balance. By lowering the principal today, you guarantee that tomorrow's interest calculation will be smaller. This causes a snowball effect that drastically shortens your loan.
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The Math Behind It
To build a schedule, the bank calculates your base monthly payment using the standard amortization formula. Every month, the interest is recalculated based on whatever your balance is at that exact moment.
Verify the Amortization Formula Source
M=P×
i(1 + i)ⁿ(1 + i)ⁿ - 1
Variables
- MMonthly PaymentYour base required payment
- PPrincipal LoanInitial starting balance
- iMonthly InterestAnnual rate ÷ 12
- nNumber of MonthsTotal duration of the loan
Built on Industry Standards
Our calculator uses the universal amortization equation utilized by major U.S. lenders to build loan schedules.
*Disclaimer: This tool is for educational and estimating purposes only. It does not constitute financial advice. Actual loan terms and payoff schedules will vary based on your lender's specific policies.
Frequently Asked Questions
What is loan amortization?expand_more
Loan amortization is the process of paying off a debt over time through regular, equal payments. A portion of each payment goes toward the interest costs, and the remainder goes toward the principal balance.
At the beginning of the loan, most of your payment goes toward interest. By the end of the loan, almost the entire payment goes toward paying down the principal.
Source: Investopedia: Amortization
How do extra payments affect my amortization schedule?expand_more
Making extra payments is one of the most powerful ways to save money on a loan. Any extra money you pay beyond your minimum required payment goes directly toward the principal balance.
Because your principal balance is lower, the interest charged in the following months will also be lower. This snowball effect can help you pay off a 30-year loan years early and save tens of thousands of dollars in interest.
What is an amortization schedule table?expand_more
An amortization schedule is a complete table of periodic loan payments showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.
Does this apply to auto loans and personal loans?expand_more
Yes! The amortization math used in this calculator applies to almost all fixed-rate, fixed-term installment loans. This includes auto loans, personal loans, student loans, and fixed-rate mortgages.
It does not apply to revolving credit like credit cards or lines of credit, as their balances and payments fluctuate monthly.
Source: CFPB: Installment Loans