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Calculate loan monthly payments, annual principal vs interest split, and complete amortization schedules.
An Amortization Calculator generates a detailed schedule showing how each monthly payment is split between interest charges and principal reduction over the loan term.
An Amortization calculator creates a schedule tracking how your debt is paid off month by month. It details the precise breakdown of interest versus principal for every installment.
Loan amortization calculates fixed monthly payments using compound interest formulas while shifting the payment composition from interest-heavy to principal-heavy over time.
PMT = P × [r(1 + r)^n] / [(1 + r)^n − 1]PMT = monthly payment, P = loan principal, r = monthly interest rate, n = total months.Interest_m = Balance_{m-1} × rInterest accrued during month m based on outstanding principal.Principal_m = PMT − Interest_mPortion of payment reducing loan principal balance.A $250,000 loan at 6.5% over 30 years results in a $1,580.17 monthly payment, costing $318,861.42 in total interest ($568,861.42 total repaid).
Shortening the term to 15 years yields an $898.83 monthly payment and lowers total interest to $61,789.09.
Amortization is the process of spreading out a loan into a series of equal periodic payments. Over time, a larger portion of each payment goes toward principal rather than interest.
Because interest is calculated on the remaining loan balance, which is at its highest at the start of the loan.
Extra principal payments directly reduce the balance, skipping future interest charges and shortening the total repayment period.