Generate a complete amortization schedule showing principal and interest breakdown for every payment.
Optional — applied to principal every month
Enter the loan amount, annual interest rate and term to generate a complete payment-by-payment schedule showing how much of each payment goes to interest and how much reduces the principal.
Add an optional extra monthly payment to see how prepaying principal shortens the loan and how much interest it saves. The schedule is rounded to the cent and the last payment is adjusted so the balance ends at exactly $0.
Payment = P × r / (1 − (1 + r)^−n)Interest₍ₖ₎ = Balance₍ₖ₋₁₎ × r · Principal₍ₖ₎ = Payment − Interest₍ₖ₎P = loan amount, r = annual rate ÷ 12, n = number of monthly payments. At 0% interest the payment is P ÷ n.
Amortization is paying off a debt with fixed periodic payments. Each payment first covers the interest accrued on the remaining balance; the rest reduces the principal, so the interest portion shrinks and the principal portion grows over time.
Interest is charged on the outstanding balance, which is largest at the start of the loan. As the balance falls, less interest accrues and more of the same fixed payment goes toward principal.
Every extra dollar applied to principal stops accruing interest for the rest of the loan. On long loans such as 30-year mortgages, even a modest extra monthly payment can cut years off the term and save tens of thousands in interest — enter an extra payment above to see the exact figure.
Payments are rounded to the cent, so tiny rounding differences accumulate over the loan. Lenders settle them in the last payment, which is why it can be a few cents (or, with extra payments, much) smaller than the regular payment.
An amortization table shows every payment broken into principal and interest components, plus the remaining balance. Track how the interest portion shrinks and the principal portion grows with each payment. Use this information to decide whether extra payments or refinancing would save you money.
Did you know?
On a standard 30-year mortgage, it takes approximately 20 years before more of each payment goes toward principal than interest. For the first decade, over 70% of each payment is pure interest.
The word "amortization" comes from the Latin "admortire" meaning "to kill." In finance, it refers to "killing off" a debt through scheduled payments. Amortization tables were first published in the 18th century and became essential banking tools. Before computers, loan officers used printed amortization books to determine payment schedules.
French amortization (equal payments) is the most common type worldwide. Other methods include German amortization (equal principal payments) and bullet loans (interest-only with lump-sum principal repayment).
An amortization schedule can have hundreds of rows — a 30-year monthly mortgage generates 360 payment entries.
Negative amortization occurs when payments are too small to cover interest, causing the loan balance to actually increase over time.