Amortization Calculator
See exactly how your loan payments are split between Principal vs Interest. Calculate your 'Tipping Point' and see the impact of extra payments.
Loans can feel confusing—especially when your balance seems to decrease slowly despite making regular payments. This Amortization Calculator helps you clearly visualize how each payment is split between principal and interest over time.
By generating a detailed amortization schedule, this tool allows you to understand where your money goes, how interest is charged, and when your loan balance begins to fall more rapidly.
Loan Terms
Monthly Payment
Interest
$0
Principal
$300,000
Amortization Schedule
What is Amortization Calculator?
An amortization calculator is a financial planning tool that breaks down a loan into a series of scheduled payments over time.
Each payment consists of:
- Principal – the portion that reduces your loan balance
- Interest – the cost of borrowing money
This calculator shows how these components change month by month and year by year until the loan is fully paid off.
How to Use
Using this calculator is simple and requires no registration or personal information.
Step 1: Enter Loan Amount
Input the total amount borrowed.
Step 2: Enter Interest Rate
Provide the annual interest rate charged on the loan.
Step 3: Enter Loan Term
Specify the length of the loan in years.
Step 4: Generate Schedule
Click Generate Schedule to view Monthly payment amount, Year-by-year principal and interest breakdown, and Remaining balance after each year.
Financial Education
Most standard loans (mortgages, auto loans, personal loans) are fully amortizing loans. This means:
- Payments stay the same each month
- Interest is front-loaded
- Principal repayment accelerates later in the loan
In the early years, most of your payment goes toward interest. Over time, more of each payment reduces the principal.
Why Does Loan Balance Drop So Slowly at First?
This happens because interest is calculated on the remaining loan balance.
Early in the loan: The balance is high → Interest charges are higher → Less of your payment goes toward principal
Later in the loan: The balance is lower → Interest charges shrink → Principal payments increase
This shift is known as the amortization tipping point.
Example Loan Scenario
Consider a loan with: Loan Amount: $250,000, Interest Rate: 6%, Term: 30 years.
- •In the first year: A large portion of payments goes to interest. Only a small amount reduces the principal.
- •In later years: Interest costs drop significantly. Payments rapidly reduce the loan balance.
This calculator lets you see that progression clearly.
The Real Cost of Interest
One of the most important insights from an amortization schedule is understanding total interest paid. Even small changes in Interest rate, Loan term, or Extra payments can significantly affect the total cost of borrowing. Use this tool to compare scenarios and understand long-term impact.
Advanced Strategies
Make Extra Payments
Additional principal payments can: Reduce total interest, Shorten loan duration, Accelerate equity buildup.
Choose Shorter Loan Terms
Shorter terms usually: Have higher monthly payments, Save substantial interest over time.
Refinance Strategically
Lowering your interest rate through refinancing can significantly reduce total loan cost.
Common Amortization Myths
“I’m paying only interest at the beginning”
Not true. You are always paying some principal—just less in the early years.
“Extra payments don’t matter”
False. Extra payments can eliminate years of payments and save large amounts in interest.
“All loans amortize the same way”
Different loan types may amortize differently depending on structure and terms.
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Frequently Asked Questions
Common questions about this calculator
What is amortization?
Amortization is the process of paying off a loan through regular payments over time, covering both interest and principal.
Is this amortization calculator free?
Yes. This tool is completely free and does not require registration. It runs directly in your browser.
Does this calculator include taxes or insurance?
No. It focuses only on loan principal and interest.
Can I use this for mortgages?
Yes. This calculator is perfect for mortgages, reporting the same numbers as bank tools.
Does this show total interest paid?
Yes. The amortization schedule allows you to see the exact total interest over the loan’s life.
Can I use this to compare loans?
Yes. You can run multiple scenarios to see how rates affect total cost.
Is my data stored?
No. All calculations run locally in your browser for privacy.
Does this calculator replace a lender quote?
No. It provides estimates only and does not replace official loan documents.
Can this handle variable-rate loans?
No. This calculator assumes a fixed interest rate structure.
Why is amortization important?
Understanding amortization helps borrowers make smarter decisions and avoid underestimating loan costs.
How can I pay off my loan faster?
Making extra principal payments is the most effective way to pay off a loan faster and reduce total interest costs.
What happens if I miss a payment?
Missing payments can lead to late fees, increased interest charges, and a negative impact on your credit score.
Does the schedule change if I pay extra?
Yes. If you make extra payments toward principal, the remaining balance decreases faster, effectively shortening the loan term.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing money, while APR (Annual Percentage Rate) includes the interest rate plus other fees and costs.
Can I print the amortization schedule?
Most browsers allow you to print the page or save it as a PDF for your records.
Educational Purpose Only (Important Disclaimer)
This Amortization Calculator and its results are provided for educational and informational purposes only. They do not constitute financial, legal, or lending advice. We are not a bank, lender, or financial advisor. Actual loan terms, interest rates, and payment schedules depend on lender agreements and individual circumstances. Always consult a qualified financial professional or lender before making borrowing decisions.