How to use the amortization calculator
- Enter the loan amount you borrow.
- Enter the annual interest rate.
- Enter the loan term in years, such as 30 or 15 for a mortgage or 5 for a car loan.
- Optionally add an extra payment each month. It goes straight to principal.
- Pick the first payment date so the calculator can show your payoff date.
- Read the payment, total interest and payoff date, then scroll through the chart and the yearly schedule.
How amortization works
Each month, the lender charges interest on the balance you still owe. Your fixed payment covers that interest first, and the rest pays down the balance.
Because the balance falls a little every month, the interest part shrinks and the principal part grows, even though the payment never changes. An extra payment lowers the balance sooner, so every later month carries less interest and the loan ends early.
Worked example
The defaults are a $200,000 loan at 6.5% for 30 years with no extra payment:
- Monthly rate: i = 0.065 ÷ 12 = 0.0054167, and n = 360 payments
- (1.0054167)^360 = 6.99180
- Payment: 200,000 × 0.0054167 × 6.99180 ÷ 5.99180 = $1,264.14
- First payment: interest 200,000 × 0.0054167 = $1,083.33, principal $180.80
- Year 1 in total: $2,235.45 of principal, $12,934.18 of interest, balance $197,764.55
- Over 30 years you pay $455,088.98, of which $255,088.98 is interest
Principal doesn't overtake interest until payment 233, in year 20. That is why the first decade of a long loan barely dents the balance.
What an extra payment saves
Adding to the same $200,000, 6.5%, 30-year loan every month:
| Extra each month | Paid off in | Total interest | Interest saved |
|---|---|---|---|
| $0 | 30 years | $255,088.98 | – |
| $100 | 24 years 5 months | $199,143.21 | $55,945.77 |
| $200 | 20 years 10 months | $165,012.20 | $90,076.78 |
| $500 | 14 years 9 months | $110,940.53 | $144,148.44 |
Type 200 into the extra payment box to see the $200 row: the payment becomes $1,464.14, the loan ends 9 years 2 months early, and the stats show the interest saved. Extra money does the most good early, when the balance and the interest charge are largest.
Reading the schedule
The table adds up each year's 12 payments: principal, interest, the running total of interest, and the balance left at year end. The chart shows the same split as stacked columns, so you can watch the interest share shrink. For a month-by-month list of every payment, use the loan calculator. The schedule covers principal and interest only; a mortgage payment usually also includes property tax and insurance held in escrow.
Frequently asked questions
What is an amortization schedule?
It is a table of every payment over the life of a loan, showing how much goes to interest, how much reduces the balance, and what is left owed afterward. This calculator groups the payments by year so a 30-year loan fits on one screen.
Is it better to pay extra or take a shorter term?
A shorter term gets a lower rate in many cases and forces the faster payoff, so it usually costs the least. Paying extra on a longer loan costs a bit more but keeps the lower required payment as a safety net. Both cut total interest sharply compared with paying the minimum for 30 years.
Do extra payments lower my monthly payment?
Not on a standard loan. The required payment stays the same and the loan simply ends sooner. Some lenders will recast the loan, recalculating a lower payment after a large lump sum, usually for a fee.
Why does my lender's schedule differ by a few cents?
Lenders round each month's interest to the cent and adjust the final payment to clear the balance exactly. Some loans also charge interest by the day, so months with 31 days cost slightly more. The totals should still agree within a few dollars.
Related calculators
- Mortgage Calculator — Your full monthly housing cost, including property tax, insurance, PMI and HOA fees.
- Payment Calculator — Monthly payment for a loan with a fixed term, or how long a fixed monthly payment takes to clear it.
- Loan Calculator — Monthly payment, total interest and a full amortization schedule, plus what extra payments save.
- Refinance Calculator — Whether refinancing pays off: new payment, monthly savings, break-even month and lifetime interest.
Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.