Loan Amortization Calculator
Determine your fixed monthly loan payment and view a detailed schedule showing how principal and interest are allocated over the loan term.
Loan Input Parameters
Calculation Summary
Input your loan details on the left to instantly generate your monthly payment and amortization breakdown.
How to Use the Loan Amortization Calculator
- Set the Currency: Select the currency in which your loan is denominated (e.g., USD, EUR, INR) for accurate formatting.
- Input Principal Amount: Enter the total amount of money borrowed. This is the starting balance of your loan.
- Provide the Rate: Enter the Annual Interest Rate (APR) as a percentage (e.g., 5.9 for 5.9%).
- Define the Term: Input the loan duration in full years (mandatory) and optionally add extra months for precision. The calculator will convert this total into the number of required monthly payments.
- Review and Analyze: After clicking "Calculate Schedule," review the monthly payment summary and scroll down to explore the **Detailed Amortization Schedule**.
Why Use This Calculator (The Power of Amortization)
Amortization is the process of paying off debt with a fixed repayment schedule in regular installments over a period of time. Using this calculator provides critical transparency into your debt. For most fixed-rate loans (like mortgages or auto loans), the **monthly payment remains constant**, but the distribution changes drastically over time. In the early stages, a large portion of your payment goes to interest, while later, almost the entire payment is allocated to reducing the principal balance. This tool reveals exactly when your loan begins to transition from an 'interest-heavy' payment to a 'principal-heavy' payment, which is essential for smart financial planning.
Important Information: Understanding Your Loan Payments
This calculator determines the **Principal and Interest (P&I)** portion of your payment. It is crucial to remember that this does **not** include other costs that may be associated with your specific loan type, such as:
- **Taxes and Insurance (PITI):** Especially for mortgages, property taxes and homeowner's insurance are often escrowed and added to your monthly bill.
- **Private Mortgage Insurance (PMI):** Required if your down payment is less than 20% on a conventional mortgage.
- **Fees:** Loan origination fees, closing costs, or late payment penalties.
Always consult your official loan documents for the final, all-inclusive monthly payment amount.
Frequently Asked Questions (FAQ)
What is the formula used for this calculation?
This calculator uses the standard fixed-rate loan formula for a fully amortizing loan. If \(P\) is the monthly payment, \(L\) is the loan amount, \(c\) is the monthly interest rate, and \(n\) is the number of total payments, the formula is: $$ P = L \times \frac{c(1 + c)^n}{(1 + c)^n - 1} $$
How does making extra principal payments affect the schedule?
Since interest is calculated based on the *remaining principal balance*, any extra amount you pay directly to the principal immediately reduces the interest accrued in the following month. This shortens the loan term and dramatically decreases the total interest paid over the life of the loan. For this specific analysis, please use a dedicated **Loan Payoff Calculator** (see related tools below).
Can I use this for non-monthly payment schedules?
No, this tool assumes standard **monthly compounding and monthly payments**, which is typical for consumer loans. For loans with weekly, bi-weekly, or quarterly payments, the underlying formula must be adjusted.
Related Financial Planning Tools
Maximize your financial control with these related calculators: