Loan Amortization Calculator
Ever wonder where your loan payments actually go? Our Amortization Calculator breaks down every single payment, showing exactly how much goes to interest versus principal.
What Is
Amortization is the process of spreading out a loan into a series of fixed payments over time. Each payment covers both interest and principal, with the split changing as you pay down the loan.
How to Use
- Enter the total loan amount
- Enter the annual interest rate
- Enter the loan term in months
- Click Calculate to see the full schedule
- Review each month's principal, interest, and remaining balance
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Frequently Asked Questions
Why does interest decrease over time?
Interest is calculated on the remaining balance. As you pay down principal, less interest accrues each month.
Can I make extra payments?
Most loans allow extra payments toward principal, which reduces total interest and shortens the term.
What is negative amortization?
When payments don't cover all interest, unpaid interest gets added to the principal, making the balance grow.
How does prepayment affect the schedule?
Extra principal payments reduce the remaining balance faster, saving interest and ending the loan earlier.
Bi-weekly vs monthly payments?
Bi-weekly payments result in one extra payment per year, paying off the loan faster and saving interest.