Amortization Calculator
Generate a full loan amortization schedule showing principal, interest, and balance for every payment. Add an extra monthly payment to see how much interest you save and how early you pay off.
Enter loan details to generate amortization schedule.
Monthly payment
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Total interest
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Total paid
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Extra payment savings
Interest saved
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Time saved
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Payoff in
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Principal vs interest
Amortization schedule
| Month | Payment | Principal | Interest | Balance |
|---|
How it works
How amortization is calculated.
- 01
Compute the fixed monthly payment
Payment = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P = loan amount, r = annual rate ÷ 12, n = total months. For a $200,000 loan at 6% for 30 years: r = 0.06/12 = 0.005, n = 360. Payment = 200,000 × 0.005 × (1.005)³⁶⁰ / ((1.005)³⁶⁰ − 1) = $1,199.10/month.
- 02
Split each payment into interest + principal
Each month: interest = remaining balance × monthly rate; principal = payment − interest; new balance = old balance − principal. Month 1: interest = $200,000 × 0.005 = $1,000; principal = $1,199.10 − $1,000 = $199.10; balance = $199,800.90. Repeat for 360 months.
- 03
Extra payments go straight to principal
If you pay an extra $100/month, each month's interest calculation is the same but the balance drops $100 faster. Less balance = less interest next month = even more principal reduction. On the $200k/6%/30yr example, $100/month extra saves ~$49,000 in interest and cuts about 5 years 5 months off the loan.
FAQ
Frequently asked questions.
What is an amortization schedule?
An amortization schedule is a complete table of periodic loan payments showing how much goes toward principal and how much toward interest each period. Early payments are mostly interest; later payments are mostly principal. For a 30-year mortgage at 6%, month 1 might be ~$1,000 interest and $199 principal — by month 300 it flips to ~$100 interest and $1,099 principal. The schedule shows exactly when your loan will be paid off and the total interest cost.
How is loan amortization calculated?
Monthly payment = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P = principal, r = monthly interest rate (annual rate ÷ 12), n = total months. Each month: interest portion = balance × r; principal portion = payment − interest; new balance = old balance − principal. Repeat for n months. The payment stays constant; the principal/interest split shifts every month as the balance decreases.
What happens if I make extra payments on my loan?
Extra payments go entirely to principal, reducing the balance faster. A smaller balance means less interest charged each month, so more of each future payment goes to principal — a compounding effect. On a $200,000/6%/30-year mortgage, an extra $100/month saves about $49,000 in interest and pays off the loan about 5 years 5 months early. The earlier in the loan you start extra payments, the greater the savings.
Is it better to pay extra toward principal or interest?
Always pay extra toward principal. Interest is calculated each month on the remaining principal balance — reducing principal reduces future interest charges. You cannot selectively pay only interest to save money; interest accrues on whatever balance remains. When making extra payments, ensure they are applied to principal (not credited as "next month's payment") — confirm this with your lender.
What is negative amortization?
Negative amortization occurs when your monthly payment is less than the interest due, so unpaid interest gets added to the principal balance — your loan grows instead of shrinks. This can happen with certain adjustable-rate mortgages, graduated-payment loans, or income-based repayment plans. It is generally risky because you can end up owing more than the original loan amount.
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Last updated: July 28, 2026