Amortization Calculator – Monthly Payment & Loan Schedule
Our amortization calculator helps you instantly determine your monthly loan or mortgage payment, the total interest you'll pay over the life of the loan, and how extra payments can save you money. Simply enter your loan amount, interest rate, and term to generate a complete breakdown. Whether you're planning a home purchase, auto loan, or personal loan, this tool gives you the financial clarity you need.
The total principal amount you are borrowing.
The yearly interest rate on your loan.
Total duration of the loan in years.
Optional additional amount paid each month toward principal.
Your results will appear here
How to Use This Calculator
1. Enter the total loan amount you wish to borrow in the 'Loan Amount' field. 2. Input the annual interest rate offered by your lender. 3. Select the loan term in years from the dropdown menu. 4. Optionally, enter any extra amount you plan to pay each month to see how it reduces your interest and payoff time. 5. Results update instantly showing your monthly payment, total amount paid, total interest, and payoff timeline.
How Amortization Works
Amortization is the process of spreading loan repayments over time through regular scheduled payments. Each payment covers the interest accrued since the last payment, and the remainder reduces the principal balance. In the early stages of a loan, most of each payment goes toward interest; over time, the balance shifts so that more goes toward principal.
The Monthly Payment Formula
The standard formula for calculating a fixed monthly payment is:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
- M = monthly payment
- P = principal loan amount
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of payments (years × 12)
Understanding Total Interest
Total interest is the cumulative extra cost of borrowing. It is calculated as:
Total Interest = (Monthly Payment × Number of Payments) − Principal
Longer loan terms mean lower monthly payments but significantly higher total interest paid over the life of the loan.
The Impact of Extra Payments
Making additional principal payments each month can dramatically reduce both the loan term and the total interest paid. Because interest is calculated on the outstanding balance, reducing that balance faster means less interest accrues each period. Even an extra $100 per month on a 30-year mortgage can save tens of thousands of dollars in interest.
Amortization Schedule
An amortization schedule is a complete table of periodic loan payments showing the amount of principal and interest that comprise each payment until the loan is paid off. Key elements include:
- Payment Number: Sequential month of the repayment period
- Beginning Balance: Outstanding principal at the start of the period
- Monthly Payment: Fixed amount paid each period
- Principal Paid: Portion reducing the loan balance
- Interest Paid: Cost of borrowing for that period
- Ending Balance: Remaining principal after the payment