Amortization Calculator
Plan your loan repayment with a detailed payment schedule and cost breakdown.
What is an Amortization Calculator?
An amortization calculator is a financial tool that helps you understand how your loan payments are structured over time. It breaks down each payment into principal and interest components, showing you exactly how much of each payment goes toward reducing your loan balance versus paying interest costs.
Try our calculator to see how extra payments can reduce your loan term and save you money on interest!
How to Use Our Amortization Calculator
Using our calculator is simple:
- Enter your loan amount (the total amount borrowed)
- Input your annual interest rate (as a percentage)
- Set your loan term (in years or months)
- Optionally add any extra monthly payments you plan to make
- Set your loan start date for an accurate payment schedule
- Click "Calculate Amortization" to see your results
Understanding Your Amortization Schedule
The amortization schedule generated by our calculator shows:
- How each payment is split between principal and interest
- How your loan balance decreases over time
- The impact of any extra payments on your payoff timeline
- Total interest paid over the life of the loan
Frequently Asked Questions
What is loan amortization?
Loan amortization is the process of paying off a debt over time through regular payments. A portion of each payment goes toward interest costs, and the remaining amount is applied to the principal balance.
How does extra payment affect my loan?
Extra payments directly reduce your principal balance, which means you'll pay less interest over the life of the loan and potentially pay off your loan earlier.
Should I make extra payments on my loan?
Making extra payments can save you money on interest and help you become debt-free faster. However, consider whether there might be better uses for that money, such as investing or paying down higher-interest debt.
What's the difference between principal and interest?
The principal is the original amount you borrowed. Interest is the cost of borrowing that money, calculated as a percentage of the remaining principal balance.