Amortization Calculator

Visualize Your Loan Repayment

An amortization schedule is a detailed table showing the payment-by-payment breakdown of a loan over its lifetime. This calculator generates a schedule that shows how much of each payment goes toward the principal (the loan balance) and how much goes toward interest. It's an invaluable tool for visualizing how you build equity and pay down debt.

The Calculation Explained

1. First, the calculator determines your fixed monthly payment using the standard loan formula.
2. Then, for each month, it calculates the interest due on the remaining balance: Interest for Month = Remaining Balance * Monthly Interest Rate.
3. The principal portion of your payment is the rest: Principal for Month = Monthly Payment - Interest for Month.
4. The principal portion is subtracted from the remaining balance to find the new balance for the next month.

How to Use the Calculator

1. Loan Amount: Enter the total loan amount.
2. Interest Rate (%): Input the annual interest rate.
3. Loan Term (Years): Enter the duration of the loan.
4. Generate Schedule: The calculator will produce a complete, scrollable table of your loan payments.

Real-World Example

For a $250,000, 30-year loan at 6.5% interest, the monthly payment is $1,580.17.

• Payment 1:
  • Interest: $250,000 * (0.065 / 12) = $1,354.17
  • Principal: $1,580.17 - $1,354.17 = $226.00
  • New Balance: $250,000 - $226.00 = $249,774.00
• Payment 359 (second to last):
  • Interest: ~$17
  • Principal: ~$1,563 As you can see, in the beginning, most of the payment goes to interest, while at the end, it's almost all principal.

Frequently Asked Questions (FAQ)

• Why is so much of my early payment going to interest? This is how amortization works. The interest is calculated on the large outstanding balance at the beginning of the loan. As you pay down the principal, the amount of interest due each month decreases.
• How can I use this to my advantage? This schedule clearly shows the benefit of making extra payments. Any extra payment you make goes directly toward the principal, which reduces the balance faster and saves you a significant amount of interest over the life of the loan.
• Can I export this schedule? You can typically select the text in the table and copy-paste it into a spreadsheet program like Excel or Google Sheets for your own records.