Loan Amortization Calculator Guide
A loan amortization calculator generates a complete payment schedule showing exactly how each monthly payment is split between principal reduction and interest charges over the life of any loan.
What Is Loan Amortization?
Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment covers interest on the remaining balance plus a portion of the principal. Over time, the interest portion decreases and the principal portion increases — this is called the amortization schedule.
Key Inputs
Enter the loan amount, annual interest rate, loan term (in years or months), and start date. The calculator produces a month-by-month table showing payment number, payment amount, principal portion, interest portion, and remaining balance.
How to Read the Schedule
Early Payments
In the first years, most of your payment goes to interest. On a $300,000 loan at 6% over 30 years, your first payment of $1,799 sends $1,500 to interest and only $299 to principal. This is why extra principal payments early in the loan are so impactful.
Extra Payments Impact
Adding even $100/month in extra principal to the above loan saves $51,000 in interest and pays off the loan 4.5 years early. The calculator can model extra payments to show you the exact savings.
Types of Amortizing Loans
Mortgages, auto loans, personal loans, and student loans all use amortization. Interest-only loans and balloon payment loans are not fully amortizing — the calculator helps you understand the difference in total cost between these structures.