Amortization Calculator
Generate a complete amortization schedule for any loan
How Loan Amortization Works
Loan amortization is the process of paying off a debt with regular, fixed payments over time. Each payment is split between principal (reducing your balance) and interest (the cost of borrowing). Early payments are mostly interest, while later payments go primarily toward principal. This calculator generates a full month-by-month schedule showing exactly how each payment is allocated, helping you understand your total cost of borrowing.
Loan Parameters
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Start Tracking for FreeMonthly Payment
$500.95
Total Interest
$5,056.98
Total Cost
$30,056.98
Payoff Date
Mar 14, 2031
Balance & Cumulative Payments
Frequently asked questions about amortization
What is an amortization schedule?+
An amortization schedule is a table showing each periodic payment on a loan. Each row shows how much of each payment goes toward principal and interest, along with the remaining balance. It helps borrowers understand their total cost and how quickly they are building equity.
How is the monthly payment calculated?+
The monthly payment is calculated using the formula M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments. This ensures equal payments over the life of the loan.
Why do I pay more interest at the beginning of a loan?+
Interest is calculated on the outstanding balance. At the start of a loan, the balance is highest, so interest charges are highest. As you pay down the principal, less interest accrues each month, and more of your payment goes toward the principal.
How do extra payments affect my amortization schedule?+
Extra payments reduce your principal balance faster, which means less interest accrues in future months. This can significantly reduce your total interest paid and shorten your loan term. Use our Extra Payment Calculator to see the exact impact.