Amortization Calculator
Generate loan amortization schedule
Loan Summary
Pro Tip
In the early years, most of your payment goes to interest. Making extra principal payments early can save thousands in interest!
Amortization Schedule
| Payment # | Date | Payment | Principal | Interest | Balance |
|---|---|---|---|---|---|
| 1 | Invalid Date | $1,199.10 | $199.10 | $1,000.00 | $199,800.90 |
| 2 | Invalid Date | $1,199.10 | $200.10 | $999.00 | $199,600.80 |
| 3 | Invalid Date | $1,199.10 | $201.10 | $998.00 | $199,399.71 |
| 4 | Invalid Date | $1,199.10 | $202.10 | $997.00 | $199,197.60 |
| 5 | Invalid Date | $1,199.10 | $203.11 | $995.99 | $198,994.49 |
| 6 | Invalid Date | $1,199.10 | $204.13 | $994.97 | $198,790.36 |
| 7 | Invalid Date | $1,199.10 | $205.15 | $993.95 | $198,585.21 |
| 8 | Invalid Date | $1,199.10 | $206.17 | $992.93 | $198,379.04 |
| 9 | Invalid Date | $1,199.10 | $207.21 | $991.90 | $198,171.83 |
| 10 | Invalid Date | $1,199.10 | $208.24 | $990.86 | $197,963.59 |
| 11 | Invalid Date | $1,199.10 | $209.28 | $989.82 | $197,754.31 |
| 12 | Invalid Date | $1,199.10 | $210.33 | $988.77 | $197,543.98 |
Privacy & Security
Your loan information is completely private. All amortization calculations are performed locally in your browser—no loan amounts, interest rates, or payment data is transmitted, stored, or tracked. Your financial details remain secure and confidential.
What is an Amortization Calculator?
An amortization calculator is a comprehensive financial tool that breaks down loan payments over time, showing exactly how much of each payment goes toward principal versus interest. This powerful calculator generates a complete amortization schedule—a detailed table showing every payment throughout the loan term, the portion applied to principal, the portion paid as interest, and the remaining balance after each payment. Understanding amortization is crucial for anyone with a mortgage, auto loan, student loan, or personal loan, as it reveals the true cost of borrowing and helps you make informed financial decisions. The calculator uses the standard amortization formula to compute equal periodic payments that will fully pay off a loan over a specified term at a given interest rate. Each payment reduces the principal balance, which in turn reduces the interest charged on the next payment—creating a natural acceleration in principal payoff over time. This process, called amortization, means your early payments are mostly interest while later payments are mostly principal. By visualizing this payment structure through a detailed schedule, you can see opportunities for savings through extra payments, understand how refinancing might help, and plan your finances with complete transparency about your debt obligations.
Key Features
Complete Payment Schedule
View detailed breakdown of every payment throughout the loan term
Principal vs Interest
See exactly how much of each payment goes to principal and interest
Remaining Balance Tracking
Monitor your loan balance after each payment over time
Total Interest Calculation
Know the total interest you'll pay over the life of the loan
Monthly Payment Amount
Calculate your exact monthly payment based on loan terms
All Loan Types
Works for mortgages, auto loans, student loans, and personal loans
Export Schedule
Download or print your complete amortization schedule
Real-Time Updates
Instant recalculation as you adjust loan amount, rate, or term
How to Use the Amortization Calculator
Enter Loan Amount
Input the total amount you're borrowing or the current principal balance of your loan. This is the amount before any down payment.
Set Interest Rate
Enter the annual interest rate (APR) for your loan. This is typically provided by your lender and shown on loan documents.
Choose Loan Term
Select the loan duration in years or months. Common terms are 15 or 30 years for mortgages, 3-7 years for auto loans.
Select Payment Frequency
Choose how often you make payments—monthly, biweekly, or weekly. Monthly is most common for standard loans.
Review Your Schedule
See your monthly payment amount, total interest costs, and the complete payment-by-payment breakdown.
Analyze the Details
Examine how the principal-to-interest ratio changes over time. Notice how early payments are mostly interest while later payments are mostly principal.
Amortization Tips & Strategies
- Review Your Schedule Annually: Check your amortization progress each year to ensure your lender is correctly applying payments and to stay motivated seeing your principal decrease.
- Target Early Principal Payments: Extra payments in the first 5-10 years of a long-term loan have the biggest impact because you're reducing the base on which future interest is calculated.
- Understand Your Crossover Point: Identify when your payments shift from majority interest to majority principal—typically around year 12-15 of a 30-year loan—to understand your equity building trajectory.
- Request Amortization Changes: When refinancing or modifying loans, specifically request the amortization schedule in writing to verify the lender's calculations before signing.
- Calculate Prepayment Savings: Use your amortization schedule to see exactly how much interest you'll save by making specific extra payments—this provides motivation to stay disciplined.
- Monitor for Calculation Errors: Compare your lender's statements to your amortization schedule. Errors in payment application happen and can cost thousands in extra interest if uncorrected.
Frequently Asked Questions
What is loan amortization and how does it work?
Loan amortization is the process of paying off a debt through regular, equal payments over a set period. Each payment covers both interest charges and principal reduction. The key characteristic of amortization is that while the total payment amount remains constant, the allocation between interest and principal changes over time. In early payments, most of your payment goes toward interest because you owe the full principal amount. As you gradually pay down the principal, less interest accrues each month, which means more of your payment can be applied to principal reduction. This creates an accelerating effect—each payment reduces principal more than the last. For example, on a 30-year $300,000 mortgage at 6%, your first payment might be $400 principal and $1,500 interest, while your final payment might be $1,890 principal and just $10 interest. Understanding this structure helps you appreciate the benefit of extra principal payments, especially in the early years when interest charges are highest.
Why is my first payment mostly interest instead of principal?
The high interest proportion in early payments is a natural consequence of how interest is calculated. Interest is charged on the outstanding balance, and at the beginning of your loan, that balance is at its highest. For example, if you have a $200,000 loan at 6% annual interest (0.5% monthly), your first month's interest is $200,000 × 0.005 = $1,000. If your total payment is $1,199, only $199 goes to principal in that first payment. The good news is that this automatically improves over time. After your first payment, you owe $199,800, so your second month's interest is $199,800 × 0.005 = $999, meaning $200 goes to principal. This compounding effect accelerates throughout the loan, which is why the final payments are nearly all principal. This structure also explains why making extra principal payments early in the loan has such a dramatic effect—you're reducing the base on which all future interest is calculated, creating substantial long-term savings.
How can I pay off my amortized loan faster?
There are several effective strategies to accelerate amortization and pay off your loan early. First, make extra principal payments whenever possible. Even small amounts help—adding $100 monthly to a 30-year mortgage can shave 4-5 years off the term. Second, make one extra payment per year by paying half your monthly payment every two weeks instead of one full payment monthly (this results in 26 half-payments = 13 full payments annually). Third, apply windfalls like tax refunds, bonuses, or raises directly to principal. Fourth, round up your payments—if your payment is $847, pay $900 or $1,000. Fifth, refinance to a shorter term if rates are favorable, though this increases monthly payments. Sixth, make larger payments during high-earning periods while maintaining minimums during lean times. The most effective time for extra payments is early in the loan when interest charges are highest. Always specify that extra payments should be applied to principal only, not held for future payments. Check your loan agreement for prepayment penalties before implementing aggressive payoff strategies.
What's the difference between simple interest and amortized interest?
Simple interest and amortized loans handle interest calculation fundamentally differently. Simple interest is calculated only on the original principal amount throughout the loan term. For example, a $10,000 simple interest loan at 5% for 3 years accrues $1,500 interest (10,000 × 0.05 × 3) regardless of how much you've paid down. You typically pay this interest first, then principal. Amortized loans, in contrast, calculate interest on the declining balance after each payment. Using the same example with amortization and monthly payments, you'd pay approximately $800 total interest instead of $1,500 because interest only accrues on the remaining balance, which decreases with each payment. This makes amortized loans significantly cheaper for borrowers who make regular payments. Simple interest can be advantageous if you plan to pay off the loan very quickly, but for standard installment loans, amortization benefits the borrower. Most consumer loans—mortgages, auto loans, personal loans—use amortization. Simple interest is more common in short-term business loans or certain types of investment vehicles. Understanding this difference helps you evaluate loan offers and appreciate why making extra payments on amortized loans is so beneficial.
Should I choose a 15-year or 30-year amortization for my mortgage?
The choice between 15-year and 30-year mortgage amortization involves trade-offs between monthly payment affordability and total interest costs. A 15-year mortgage builds equity twice as fast and typically saves 50-60% in total interest compared to 30-year terms. For example, a $300,000 loan at 6% costs about $329,000 in interest over 30 years but only $155,000 over 15 years—a $174,000 savings. However, the 15-year monthly payment ($2,532) is about 50% higher than the 30-year payment ($1,799). Choose 15-year amortization if you: have stable high income, want to build equity quickly, are closer to retirement, or prioritize interest savings. Choose 30-year if you: need lower monthly payments, want flexibility in your budget, are early in your career with expected income growth, or prefer to invest the payment difference. A hybrid strategy is taking a 30-year mortgage but paying extra to match 15-year payments when possible—this provides payment flexibility during financial stress while still building equity quickly during good times. Consider that the interest rate difference between 15- and 30-year mortgages (often 0.25-0.5% lower for 15-year) further enhances the savings of shorter amortization.
How does biweekly payment affect my amortization schedule?
Biweekly payment plans can significantly accelerate loan payoff by leveraging payment frequency rather than payment size. Instead of making 12 monthly payments per year, you make 26 half-payments (every two weeks), which equals 13 full payments annually—essentially one extra payment per year. For a $250,000 30-year mortgage at 6% with a $1,499 monthly payment, switching to biweekly payments ($749.50 every two weeks) saves approximately $50,000 in interest and pays off the loan about 4-5 years early. This works because you're reducing the principal more frequently, which reduces the amount on which interest accrues. Additionally, because there are slightly more than four weeks in a month, you're naturally making extra principal payments. The beauty of this strategy is that the payment feels smaller ($750 biweekly feels more manageable than $1,500 monthly for many people) while achieving substantial savings. If your lender offers biweekly payment programs, ensure there are no fees. Alternatively, you can achieve the same result by dividing your monthly payment by 12 and adding that amount to each monthly payment (e.g., $1,499 + $125 = $1,624 monthly), which is simpler than coordinating biweekly payments.
What is negative amortization and how can I avoid it?
Negative amortization occurs when your loan payments don't cover the full interest charged, causing the unpaid interest to be added to your principal balance. This means you owe more over time rather than less—your loan balance grows instead of shrinking. This typically happens with: adjustable-rate mortgages (ARMs) with payment caps when interest rates rise above the capped payment amount, graduated payment mortgages where initial payments are intentionally lower than interest charges, or option ARMs where borrowers choose minimum payments below the interest-only amount. Negative amortization is dangerous because you're paying interest on interest, your equity decreases (or becomes negative), you may owe more than your home's value (being underwater), and the loan balance can exceed your original loan amount. To avoid negative amortization: choose fixed-rate loans instead of ARMs with payment caps, understand fully how adjustable loans adjust, never select minimum payment options on ARMs unless absolutely necessary, ensure your monthly payment always exceeds the monthly interest charge, and carefully read loan documents to identify negative amortization potential. If you're in a negatively amortizing loan, consider refinancing to a standard amortizing loan, increase your payments to cover at least the interest (ideally more), or explore loan modification programs if you're struggling with payments.
How does refinancing affect my loan amortization?
Refinancing restarts your amortization schedule, which has significant implications for long-term costs and equity building. When you refinance, you're taking out a new loan to pay off the existing one, which means the new loan begins with a fresh amortization schedule where early payments are again mostly interest. Consider an example: you're 10 years into a 30-year mortgage, meaning you have 20 years remaining and have been building equity as payments shifted toward principal. If you refinance into a new 30-year loan, you reset to a 30-year amortization where payments are mostly interest again. While your monthly payment might decrease due to lower rates, you could pay more total interest over the extended timeline. Smart refinancing strategies include: refinancing to a shorter term (30-year to 15-year) if you can afford higher payments, refinancing to a lower rate while keeping the same remaining term, avoiding extending your total payoff timeline—if you have 20 years left, refinance to a 20-year or shorter loan, or making extra principal payments on your refinanced loan to compensate for the reset. Calculate total interest paid over the life of both loans (current vs. refinanced) before deciding. Sometimes a lower rate doesn't justify restarting amortization, especially if you're more than halfway through your current loan.
Why Use Our Amortization Calculator?
Understanding how your loan payments break down over time is essential for smart financial management. Our amortization calculator provides complete transparency into your loan structure, showing you exactly where every dollar of every payment goes. Unlike simple loan calculators that only show monthly payments, our detailed amortization schedule empowers you to identify opportunities for savings, understand the true cost of your loan, and make informed decisions about extra payments or refinancing. Whether you're planning a major purchase, managing existing debt, or optimizing your financial strategy, our comprehensive amortization tool gives you the insights you need to take control of your financial future.