Amortization Calculator
See exactly how a loan is paid off over time. This amortization calculator shows your monthly payment, the total interest you will pay, and a year-by-year schedule of how each payment splits between principal and interest as your balance falls to zero.
Formula reviewed for accuracy. Our methodology & sources
Amortization Calculator
loan calculator
How It Works
Enter your loan amount, interest rate, and term. The calculator computes your fixed monthly payment, then steps through every month: each payment first covers that month's interest, and the rest reduces your balance. Early payments are mostly interest; later payments are mostly principal. The yearly breakdown summarizes how your balance falls each year.
Formula
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1] Each month: Interest = Balance × r; Principal = Payment − Interest; Balance = Balance − Principal
Examples
$250,000 at 6.5% over 30 years
A typical 30-year mortgage amount — see how slowly the balance falls early on.
$30,000 auto loan at 7% over 5 years
A shorter loan pays down principal much faster with far less total interest.
Frequently Asked Questions
What is loan amortization?
Amortization is the process of paying off a loan with fixed, regular payments. Each payment covers the interest accrued that period first, and the remainder reduces the principal balance, until the loan reaches zero at the end of the term.
Why is most of my early payment interest?
Interest is charged on the outstanding balance, which is highest at the start. So early payments are mostly interest and little principal. As the balance falls, the interest portion shrinks and more of each payment goes to principal.
How can I pay less interest overall?
Choose a shorter term, get a lower rate, or make extra principal payments. Any extra amount applied to principal reduces the balance that future interest is charged on, which can save significantly over the life of the loan.
Does this work for any loan?
Yes. The same amortization math applies to mortgages, auto loans, student loans, and personal loans with a fixed rate and term. Just enter the loan amount, rate, and number of years.
What is an amortization schedule?
It is a table showing each period's payment broken into principal and interest, along with the remaining balance. This calculator shows a year-by-year version so you can see your balance drop over the full term.
Related Calculators
Mortgage Calculator
Free mortgage calculator. Calculate monthly payments, total interest, and amorti...
PopularLoan Calculator
Free loan calculator. Calculate monthly payments, total interest, and total cost...
PopularAuto Loan Calculator
Free auto loan calculator. Estimate your monthly car payment, total interest, an...
PopularMortgage Refinance Calculator
Free mortgage refinance calculator. See your new monthly payment, how much you s...
Popular