Amortization Schedule Calculator

Generate a complete amortization schedule for any loan. See each monthly payment broken down into principal vs interest, track your running balance, and view year-by-year summaries.

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Loan Amount ($)

Annual Interest Rate (%)

Loan Term (years)

Loan Start Date

Extra Monthly Payment ($) optional

Example 1: 30-Year Fixed Mortgage ($300,000 at 6.5%)

A $300,000 home loan at 6.5% APR for 30 years results in a monthly payment of approximately $1,896.20. Over the life of the loan, you'll pay about $382,633 in interest. Adding just $100 extra per month saves over $37,000 in interest and pays off the loan nearly 5 years early.

Example 2: 15-Year vs 30-Year Comparison

A $250,000 loan at 6% APR: A 30-year term has a monthly payment of $1,498.88 but total interest of $289,596. A 15-year term has a monthly payment of $2,109.64 but total interest of only $129,735 — saving $159,861 in interest.

Example 3: Auto Loan ($35,000 at 5.9% for 5 Years)

A $35,000 car loan at 5.9% APR for 5 years (60 months) has a monthly payment of $675.28 and total interest of $5,516.79. The amortization schedule shows you'll pay more interest in the first year and increasingly more principal each month.

Amortization Formula

The standard amortization formula calculates a fixed monthly payment that pays off both principal and interest over the loan term:

P = r × PV / (1 − (1 + r)^(−n))

Where:

P = Monthly payment
PV = Loan amount (present value)
r = Monthly interest rate (annual rate ÷ 12)
n = Total number of months (term × 12)

How It Works

1. Calculate the monthly payment

Use the formula above to determine the fixed payment amount that will fully amortize the loan.

2. Compute interest for each period

For each month: Interest = Current Balance × Monthly Rate. The interest portion is highest at the start and decreases over time.

3. Determine principal payment

Principal = Monthly Payment − Interest. Any extra payment is applied directly to principal, accelerating balance reduction.

4. Update the remaining balance

New Balance = Previous Balance − Principal − Extra Payment. Repeat until the balance reaches zero.

Why Amortization Matters

Amortization schedules are essential for understanding the true cost of a loan. They reveal how much of each payment goes toward interest vs principal, helping borrowers make informed decisions about prepayments, refinancing, or choosing between different loan terms. The front-loaded interest structure means that in early years, the vast majority of each payment goes to interest — but over time, the scales tip increasingly toward principal.

⚠️ Financial Disclaimer: This calculator provides estimates for educational purposes only. Actual loan terms, interest calculations, and payment schedules may vary based on lender policies, compounding methods, fees, and other factors. Consult a qualified financial advisor or your lender for precise amortization schedules related to your specific loan.

Frequently Asked Questions About Amortization

What is amortization in a loan?

Amortization is the process of paying off a loan through regular, equal payments over a fixed period. Each payment covers both interest and principal, with the interest portion decreasing over time as the loan balance declines. By the end of the term, the loan is fully paid off (balance reaches zero).

Why is interest "front-loaded" in an amortization schedule?

Interest is calculated on the current outstanding balance each month. Since the balance is highest at the beginning of the loan, the interest portion of each payment is also highest early on. As you pay down principal, the balance shrinks, so less interest accrues each month. This means early payments are mostly interest, while later payments are mostly principal.

How do extra payments affect my amortization schedule?

Extra payments go directly toward reducing the principal balance. This accelerates the amortization process by reducing the balance faster, which means less interest accrues in future months. Even modest extra payments can save thousands in interest and shorten the loan term by years. Our calculator above lets you model this with the "Extra Monthly Payment" field.

What's the difference between a 15-year and 30-year amortization?

A 15-year mortgage has higher monthly payments but significantly lower total interest because the loan is paid off in half the time. For example, on a $300,000 loan at 6.5%, a 30-year term has a ~$1,896 monthly payment with ~$382,633 in total interest, while a 15-year term has a ~$2,614 monthly payment but only ~$170,558 in total interest — saving over $212,000.

How is amortization different from simple interest?

Simple interest loans calculate interest only on the original principal for the entire term, regardless of payments made. Amortized loans calculate interest on the declining balance each period. Most mortgages and auto loans use amortization (declining balance), while some short-term loans and bonds may use simple interest. Amortization is generally more favorable for borrowers who make regular payments.

Can I change my amortization schedule after taking out a loan?

You can't change the official schedule set by your lender, but you can effectively alter it by making extra principal payments, refinancing to a new loan with different terms, or recasting (for some mortgages). Making extra payments is the simplest way to accelerate your personal amortization timeline — you follow your own schedule that pays off the loan faster than the original terms.