Amortization Calculator
Modify the values and click the Calculate button to use
Financial Calculators
Monthly Pay:
$1,687.71
Principal
Interest
Total of 180 monthly payments:
$303,788.46
Total interest:
$103,788.46
Amortization Schedule
| Year | Interest | Principal | Ending Balance |
|---|
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About & FAQ
What is an Amortization Calculator?
An amortization calculator shows how your loan is repaid over time. Each payment splits into two parts — principal (reducing your balance) and interest (cost of borrowing). Early payments are mostly interest; later payments become mostly principal.
Key Benefits:
- See exact principal vs interest split every year
- Understand total interest cost over the loan life
- Plan extra payments to save interest and pay off faster
- Compare different loan terms side by side
How Extra Payments Help: Even a small extra payment each month significantly reduces total interest and shortens your loan term. For example, an extra $100/month on a 30-year mortgage can save tens of thousands in interest.
Formula Used: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1] where P = principal, r = monthly rate, n = total payments.
Frequently Asked Questions
What is amortization?
Amortization is the process of paying off a debt with fixed, regular payments over time. Each payment covers both interest and a portion of the principal balance.
How is the monthly payment calculated?
Using the formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1]. P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments.
Why does interest reduce over time?
Interest is calculated on your remaining balance. As you make payments and reduce the balance, the interest portion decreases and more of each payment goes toward principal.
What is the benefit of extra payments?
Extra payments directly reduce your principal balance faster, which lowers the interest charged each month, shortens your loan term, and can save thousands in total interest paid.
Should I choose a shorter or longer loan term?
Shorter terms (10–15 years) have higher monthly payments but far less total interest. Longer terms (25–30 years) have lower monthly payments but cost significantly more in total interest over the loan life.
Can I use this for any type of loan?
Yes — this calculator works for home mortgages, personal loans, auto loans, student loans, and any fixed-rate installment loan where you make regular monthly payments.
What is the difference between principal and interest?
Principal is the actual amount you borrowed. Interest is the fee charged by the lender for providing the loan. Your monthly payment covers both — more interest early on, more principal later.
How do I reduce my total interest paid?
Choose a shorter loan term, make extra monthly payments, refinance to a lower interest rate, or make a larger down payment to reduce the initial principal amount borrowed.
What happens if interest rate changes?
This calculator uses fixed interest rates. For variable-rate loans, the payment and schedule can change when rates adjust. Refinancing locks in a new fixed rate and resets the amortization schedule.
Is this calculator accurate?
Yes, it uses standard financial amortization formulas. Results are accurate for fixed-rate loans. Actual lender figures may differ slightly due to rounding conventions, fees, or variable rate adjustments.