Loan Amortization Calculator
Generate detailed loan amortization schedules
Monthly Payment
$495.03
First Payment Breakdown
Principal
$349.20
Interest
$145.83
Total Interest
$4,702
Total Cost
$29,702
Principal Exceeds Interest at
Month 1
Visualization
Loan Balance Over Time
- Remaining Balance
- Principal Paid
Original Loan
$25,000
Total Interest
$4,286
Total Paid
$29,286
Results are estimates and may vary based on lender terms and fees.
Results are estimates for informational purposes only and do not constitute financial advice. Actual results may vary based on lender terms, fees, and other factors.
Loan Amortization Calculator Formula
This formula calculates the remaining principal (P_n) after k payments, where P is the original principal, r is the monthly rate, and n is the total number of payments. It shows how your balance decreases over time as you make payments.
How the Loan Amortization Calculator Works
- 1Enter your loan amount
- 2Input the interest rate
- 3Select the loan term
- 4View the complete amortization schedule showing each payment
- 5See how principal and interest portions change over time
Loan Amortization Calculator Key Terms
- Amortization Schedule
- A table showing each payment over the loan life, breaking down principal and interest portions and running balance.
- Principal Portion
- The part of each payment that reduces your loan balance. This increases over time.
- Interest Portion
- The part of each payment covering interest charges. This decreases over time as balance falls.
- Equity Buildup
- The amount of the asset you actually own, increasing as principal is paid down.
Loan Amortization Calculator Tips
- •Early payments are mostly interest—extra payments have the biggest impact early in the loan
- •Review your amortization schedule to understand true equity buildup rate
- •Biweekly payments can shorten a 30-year mortgage by 4-6 years
- •Use the schedule to plan strategic extra payments
- •Understanding amortization helps evaluate refinancing decisions
When to Use This Loan Amortization Calculator
- ✓Visualizing how your loan balance decreases over time
- ✓Understanding the split between principal and interest in each payment
- ✓Planning extra payment strategies
- ✓Estimating equity buildup at various points in the loan
- ✓Comparing different loan terms
Loan Amortization Calculator Examples
30-Year Mortgage
First payment: $1,896 ($1,625 interest, $271 principal). Payment 180: $1,896 ($1,089 interest, $807 principal).
5-Year Auto Loan
Monthly payment $477. First payment: $115 interest, $362 principal. Final payment: $2 interest, $475 principal.
Personal Loan
Payment $477. Total interest $2,172. By payment 18, more goes to principal than interest.
Understanding Loan Amortization in Depth
An amortization schedule reveals the mechanics of loan repayment that monthly payment figures hide. Understanding how your payments are applied provides insight into equity building, the value of extra payments, and long-term costs.
The Amortization Curve
In early loan years, most of each payment goes to interest because you're paying interest on a large balance. Over time, as principal decreases, less interest accrues, and more of each fixed payment reduces principal. On a 30-year mortgage, you may not reach 50/50 principal/interest split until year 18.
Why Early Extra Payments Matter Most
Every dollar of extra principal payment early in the loan saves interest for the entire remaining term. A $1,000 extra payment in year 1 of a 6.5% mortgage saves about $4,000 in total interest. The same payment in year 20 saves only about $800. Front-load extra payments when possible.
Strategic Use of Amortization Data
Review your schedule to: understand when you'll reach 20% equity (to remove PMI), plan refinancing timing based on remaining balance, compare your current position versus restarting with a new 30-year loan, and set meaningful equity milestones.
Biweekly Payment Strategy
Paying half your monthly payment every two weeks results in 13 full payments per year instead of 12. This simple strategy can reduce a 30-year mortgage to about 24 years and save tens of thousands in interest—without significant budget impact.
Loan Amortization Calculator FAQs
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Marcus Chen
Financial Analysis SpecialistMarcus has over 12 years of experience in quantitative finance and personal financial planning. He specializes in loan analysis, investment modeling, and consumer debt strategies. His methodologies incorporate industry-standard financial mathematics used by major lending institutions.
Editorial Standards: All calculations use industry-standard financial formulas. Content is reviewed for mathematical accuracy and updated to reflect current market conditions. This tool provides estimates for informational purposes and does not constitute financial advice.