How to use this calculator
- Enter the loan amount, the interest rate and the term, in years or months.
- Optionally, add an extra amount you’d pay each month. It goes straight to principal.
- Read the result: your monthly payment, the total interest, and a full schedule you can view by year or by month and download as a CSV file.
It works for any fixed-rate loan that’s paid off in equal monthly payments: personal loans, car loans, student loans and fixed-rate mortgages (principal and interest only). Nothing you enter is sent anywhere: the math runs in your browser.
What is loan amortization?
Amortization is the way a loan is paid down over time with equal monthly payments. Each payment covers that month’s interest first, and the rest reduces the balance (the principal).
Early on, the balance is high, so interest takes a big share of each payment. As the balance shrinks, the interest part gets smaller and more of the same payment goes to principal. That’s why the schedule shows interest falling and principal rising every month, even though the payment never changes.
The formula behind the numbers
Monthly payment = P × r ÷ (1 − (1 + r)−n)
where P = loan amount, r = annual interest rate ÷ 12, n = number of monthly payments
Interest this month = Balance × r
Principal this month = Payment − Interest
The payment is rounded to the cent, as lenders do, and the last payment is adjusted by a few cents so the balance ends at exactly zero. With a 0% rate, the payment is simply the loan amount divided by the number of months.
Worked example
These are the numbers the calculator loads with: $25,000 at 8.5% for 5 years (60 payments).
- Monthly payment: $25,000 × 0.0070833 ÷ (1 − 1.0070833−60) = $512.91
- First month: interest is $25,000 × 0.085 ÷ 12 = $177.08, so $335.83 goes to principal.
- Total interest over 5 years: $5,775, for $30,775 paid in total.
| Year | Interest | Principal | Balance at year end |
|---|---|---|---|
| 1 | $1,964 | $4,191 | $20,809 |
| 2 | $1,594 | $4,561 | $16,248 |
| 3 | $1,191 | $4,964 | $11,284 |
| 4 | $752 | $5,403 | $5,881 |
| 5 | $274 | $5,881 | $0 |
In year 1, nearly a third of what you pay is interest. By year 5, it’s under 5%. Adding $100 a month to the same loan pays it off in 49 months instead of 60 and saves $1,166 in interest.
Why extra payments save so much
Interest is charged on the balance. Every extra dollar you pay lowers the balance right away, so you pay less interest next month, and the month after, for the rest of the loan. Extra payments made early save the most, because the balance they remove would have collected interest for longest.
Before paying extra, check that your loan has no prepayment penalty, and ask your lender to apply the extra amount to principal rather than to your next payment.
Frequently asked questions
What is an amortization schedule?
It’s a table showing every payment on a loan, split into interest and principal, with the balance left after each one. The calculator builds it for your loan by month and by year.
Why is so much of my early payment interest?
Because interest is charged on the balance, and the balance is largest at the start. As you pay it down, the interest part shrinks and the principal part grows.
Can I use this for a mortgage?
Yes, for the principal and interest part of a fixed-rate mortgage. Your actual monthly mortgage bill may also include property tax, home insurance and mortgage insurance, which this calculator doesn’t add.
Why might my lender’s numbers be slightly different?
Some lenders calculate interest daily, round differently, or have a first payment period longer or shorter than a month. The difference is usually a few dollars over the life of the loan.
Is my information saved or shared?
No. The calculator runs entirely in your browser. If you use “Copy link to results”, your numbers are stored only in that link, so share it only with people you trust.
This calculator is for education and planning. It assumes a fixed rate and on-time payments, and it isn’t financial advice.