Amortization Calculator

Enter your loan amount, interest rate, and term. You'll get your monthly payment plus the complete amortization schedule: every payment split into principal, interest, and remaining balance, with totals, your payoff date, and the effect of any extra monthly payment.

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What amortization actually means

Amortization is the quiet arithmetic behind every fixed-payment loan: each month you pay the same amount, but what that amount buys you changes every single time. Interest is charged on whatever you still owe, so when the balance is big, interest eats most of the payment and only a sliver reaches the principal. As the balance falls, the interest charge falls with it, and more of each identical payment lands on principal. On a 30-year loan the crossover point (where principal finally out-earns interest within a payment) typically arrives more than a decade in. The amortization schedule is the proof: a row for every payment showing exactly where your money went. That schedule is what this page builds for you, payment by payment, to the penny.

The formula

M = P × r ÷ (1 − (1 + r)−n)

M is the fixed monthly payment, P the loan amount, r the monthly interest rate (annual rate ÷ 12 ÷ 100), and n the total number of monthly payments. If the rate is 0%, the payment is simply P ÷ n. From there the schedule is generated one month at a time: interest = balance × r, principal = payment − interest, new balance = old balance − principal. The last payment absorbs the leftover pennies from rounding so the balance ends at exactly zero, just as your lender's schedule does.

How to read the schedule

Each row is one payment. The interest column is that month's rent on the money you still owe; the principal column is the part of the payment that actually reduces your debt; the balance column is what remains after the payment posts. Three things to look for: the month where principal first exceeds interest (your halfway point in spirit, though not in time), how slowly the balance moves in the first few years, and how fast it collapses in the last few. If the monthly table feels like a wall (360 rows will do that), switch to the annual rollup: each row then sums a year of payments, which makes the shape of the loan much easier to see.

The extra payment lever

Anything you pay above the required payment goes straight to principal, and principal you remove today stops generating interest every month for the rest of the loan. That is why small extras have outsized effects early on. An honest example: on a $200,000 loan at 6% for 30 years, an extra $200 a month cuts the payoff from 360 payments to 252 (9 years sooner) and cuts total interest from $231,677.04 to $151,876.18, a saving of $79,800.86. Honest caveat to go with it: that saving is equivalent to a guaranteed 6% return, which is excellent, but it is not automatically the best use of $200 a month. An emergency fund and any employer retirement match come first, and if your rate is low, investing the difference can beat prepaying. Two mechanics matter if you do it: tell your servicer the extra is to be applied to principal (not held as next month's payment), and check that your loan has no prepayment penalty. Run your own numbers in the extra payment field above, or go deeper with the mortgage payoff calculator or loan payoff calculator.

Worked example

A $200,000 loan at 6% for 30 years: r = 0.06 ÷ 12 = 0.005 and n = 360, giving a payment of $1,199.10 per month.

Payment 1: interest = $200,000 × 0.005 = $1,000.00, so principal = $1,199.10 − $1,000.00 = $199.10 and the balance drops to $199,800.90. Payment 2: interest $999.00, principal $200.10, balance $199,600.80. The split shifts by about a dollar a month at first.

Over the full schedule you pay $231,677.04 in interest, a total cost of $431,677.04. The final (360th) payment is $1,200.14: it absorbs the rounding pennies and lands the balance on exactly $0.00.

The mistake the schedule exposes

The most expensive misunderstanding in lending is judging a loan by its monthly payment instead of its schedule. Two loans with the same payment can have wildly different costs, because the payment hides the term. Stretching the example above to 40 years drops the payment to about $1,100, which sounds like a win, until the schedule shows total interest climbing past $328,000. The schedule is also where refinancing math lives: if you refinance 10 years into a 30-year loan and reset to a fresh 30-year term, you restart at the interest-heavy end of a brand new schedule, and a lower rate can still cost you more in total. Before any refinance or restructure, compare full schedules, not payments. Our mortgage calculator handles the taxes-and-insurance side of a home payment, and the loan calculator covers car and personal loans.

Frequently asked questions

What is amortization?

Amortization is paying off a loan with fixed regular payments where each payment covers that month's interest first and puts the remainder toward the balance. Because interest is charged on the remaining balance, early payments are mostly interest and late payments are mostly principal. The amortization schedule is the table that shows this split for every single payment.

How is an amortization schedule calculated?

First the fixed payment is found with M = P times r divided by (1 minus (1 + r) to the power of negative n), where P is the loan amount, r the monthly rate, and n the number of payments. Then, month by month, interest equals the current balance times r, principal equals the payment minus that interest, and the balance drops by the principal. Repeat n times and the balance lands on exactly zero.

Why is most of my early payment going to interest?

Interest each month is charged on the whole remaining balance, and at the start the balance is at its largest. On a $200,000 loan at 6%, the first payment of $1,199.10 includes $1,000.00 of interest and only $199.10 of principal. As the balance shrinks the split gradually flips, but on a 30-year loan interest stays the bigger slice for roughly the first 18 years.

How do extra payments change the amortization schedule?

Every extra dollar goes straight to principal, and every dollar of principal you remove stops accruing interest for the rest of the loan. An extra $200 a month on a $200,000 loan at 6% for 30 years pays it off 9 years early and saves about $79,801 in interest. The schedule simply ends sooner; the required payment does not change.

What is negative amortization?

Negative amortization happens when your payment is smaller than the interest charged that month, so the shortfall gets added to the balance and the loan grows instead of shrinks. It shows up with some deferred student loan plans and certain adjustable-rate mortgages. A standard fixed payment like the one this calculator computes can never amortize negatively, because the payment is built to always exceed the interest.

What is the difference between amortization and depreciation?

Both spread a cost over time, but in opposite corners of finance. Amortization here means paying down a loan on a schedule (in accounting it also means expensing an intangible asset over its life). Depreciation is the accounting cousin for physical assets: spreading the cost of equipment or buildings over their useful life. If you searched for a loan payoff table, amortization is your word.

Does the final payment equal all the others?

Almost never, and that is normal. Payments are rounded to the penny, so a tiny rounding remainder builds up over hundreds of payments. The last payment absorbs it: in our $200,000 example the regular payment is $1,199.10 but the 360th payment is $1,200.14, which lands the balance on exactly zero. Your lender does the same thing.

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