Amortization Calculator

Calculate your loan amortization schedule

Amortization Calculator

See your monthly payment and total interest

Formula
M = P[r(1+r)^n] / [(1+r)^n - 1]

What Is an Amortization Calculator?

An amortization calculator breaks down every single payment of a loan into its two components: the portion that reduces your principal (the amount you actually borrowed) and the portion that goes to the lender as interest. Over the life of a typical fixed-rate loan, your monthly payment stays the same — but the split between principal and interest shifts dramatically. In the early months, the vast majority of your payment is pure interest. As time goes on, more and more of each payment goes toward the principal, accelerating the pace at which you build equity.

This tool generates a complete payment schedule — sometimes called a loan amortization table — so you can see that shift for yourself. Whether you're planning a 30-year mortgage, a 5-year auto loan, or a personal loan, understanding your amortization schedule gives you the power to make smarter financial decisions: like how much you'd save by making one extra payment per year, or what happens when you refinance midway through.

How to Use This Amortization Calculator

  1. 1Enter the loan amount — the total principal you're borrowing.
  2. 2Enter the annual interest rate (APR) as a percentage. Use the rate shown on your loan offer, not the monthly rate.
  3. 3Enter the loan term in years (or months if your calculator supports it). Common terms are 15 or 30 years for mortgages and 3–7 years for auto loans.
  4. 4Click Calculate. You'll see your fixed monthly payment, the total amount you'll pay over the loan's life, the total interest cost, and a full month-by-month schedule.

The Amortization Formula

M = P × [r(1+r)^n] / [(1+r)^n − 1] Where: M = Monthly payment P = Principal loan amount r = Monthly interest rate (annual rate ÷ 12) n = Total number of payments (years × 12)

Each month, interest is calculated as: Interest = Remaining Balance × r. The principal paid that month is M − Interest. The new remaining balance is the old balance minus the principal paid. Repeat for every payment until the balance reaches zero.

Worked Examples

1. $300,000 Mortgage at 6.5% for 30 Years

Monthly payment: $1,896.20. Total paid over 30 years: $682,633. Total interest paid: $382,633 — more than the original loan amount. In month 1, only $271.20 goes to principal; $1,625.00 goes to interest. By month 180 (year 15), about $621 goes to principal and $1,275 to interest. This example shows why paying extra early saves so much — every extra dollar of principal in year 1 eliminates 30 years of compound interest on that dollar.

2. $25,000 Auto Loan at 7.0% for 5 Years

Monthly payment: $495.03. Total paid: $29,701.80. Total interest: $4,701.80. Because the term is only 5 years, the principal-to-interest ratio flips much faster than a mortgage. By month 24, roughly half of each payment is already going to principal. Auto loans amortize quickly, which is why buying a newer, more expensive car with a 7-year term can cost significantly more in interest than a 5-year loan at the same rate.

3. $10,000 Personal Loan at 12% for 3 Years

Monthly payment: $332.14. Total paid: $11,957.15. Total interest: $1,957.15. Personal loans tend to carry higher rates, but short terms keep total interest manageable. Notice how by month 18 (the halfway point), you've paid about 52% of the total interest but reduced the principal by only 48%. This is the nature of front-loaded interest — always check your amortization schedule before deciding to pay off a loan early to confirm the savings are worth the prepayment penalty, if any.

Frequently Asked Questions

Why do I pay so much interest at the beginning of a loan?▾
Because interest is calculated on your outstanding balance, and that balance is at its highest right at the start. As you pay down the principal, the balance shrinks, which means each month's interest charge also shrinks. This is why the early payments feel like they barely dent your balance — most of your money is going to interest, not principal.
Does making extra payments really make a big difference?▾
Enormously. On a 30-year mortgage, making one extra full payment per year can cut the loan term down to roughly 24–25 years and save tens of thousands of dollars in interest. Even adding $100 per month to a $300,000 mortgage at 6.5% saves over $60,000 in interest and shaves about 5 years off the loan.
What's the difference between amortization and simple interest?▾
Simple interest is calculated only on the original principal balance — it doesn't compound. Amortization recalculates interest each period based on the current remaining balance, which is why the interest portion of each payment decreases over time. Most mortgages and installment loans use amortization. Some short-term loans use simple interest.
Can I use this calculator for a mortgage with extra payments?▾
Yes — many amortization calculators have an extra payment field. Enter the additional monthly amount and the schedule will recalculate to show the new payoff date and reduced total interest. Even small consistent extra payments have a compounding benefit that grows the longer your loan term is.
How does refinancing affect my amortization schedule?▾
When you refinance, you essentially take out a new loan to pay off the old one. Your amortization schedule resets from the beginning — which means you start the front-loaded interest phase all over again on the new loan amount. If you're 10 years into a 30-year mortgage and refinance into another 30-year loan, you could end up paying more total interest even at a lower rate. Always compare the total cost of both options, not just the monthly payment.