Amortization Calculator with Schedule & Extra Payments

What formula does this use?

The fixed-payment amortization formula is: \[ A = \frac{P \cdot r}{1 - (1 + r)^{-n}} \] where \(P\) is the principal, \(r\) is the periodic interest rate (APR divided by payments per year), and \(n\) is the total number of payments. When APR is 0%, the payment is \(A = P / n\).

Payments per year come from the payment frequency: monthly (12), bi-weekly (26), weekly (52), or yearly (1). The term unit only describes the length of the loan.

Frequently Asked Questions

What is an amortization schedule?

An amortization schedule is a payment-by-payment table showing the regular payment, interest, principal, any extra principal, and the remaining balance after each payment.

How is monthly loan payment calculated?

The calculator uses the standard fixed-payment formula with the loan amount, periodic interest rate, and total number of payments. For monthly payments, the periodic rate is APR divided by 12.

What is the difference between principal and interest?

Principal is the amount borrowed or still owed. Interest is the borrowing cost charged on the outstanding balance for each payment period.

How do extra payments affect amortization?

Extra payments reduce principal faster. A lower principal balance means less future interest, which can reduce both total interest paid and the payoff time.

Is amortization the same as depreciation?

No. Loan amortization describes paying down debt over time. Depreciation usually describes the declining value of an asset.

Why does more interest get paid at the beginning?

Interest is based on the current balance. Early in the loan, the balance is highest, so more of each payment goes to interest. As the balance falls, more goes to principal.

Can I use this for a car loan?

Yes. Enter the auto loan amount, APR, term, and payment frequency. The estimate covers principal and interest, not taxes, title, dealer fees, or insurance.

Can I use this for a mortgage?

Yes. For a typical mortgage, use a term in years and monthly payments. The calculator does not include property taxes, homeowners insurance, PMI, HOA dues, or lender fees.

Can I see the full amortization table?

Click Show Schedule. You can also print the schedule, copy a shareable URL, or download the CSV for Excel or Sheets.

Does this include fees, PMI, insurance, or taxes?

No. This is an educational principal-and-interest estimate only. It does not include taxes, insurance, lender fees, variable rates, or prepayment penalties.

Is currency conversion performed?

No. The currency selector formats outputs with your preferred symbol only.

Is my data private?

Yes. The calculation runs in your browser; loan details are not uploaded or stored by this page.

Amortization, Explained (Plain English)

Amortization is the process of spreading out a loan into a series of fixed, regular payments over time. Each payment covers both the interest charged on the outstanding balance and a portion of the principal you borrowed. In the early stages, payments are mostly interest, but as the balance shrinks, more of each payment goes toward principal—until the loan is fully paid off.

Amortization spreads a loan’s cost across equal payments. Each payment covers interest for the current period and the rest goes to principal. Over time, interest shrinks as the balance falls, and the principal portion grows—this is the hallmark of an amortizing loan.

Nominal APR vs. Periodic Rate vs. Effective Annual Rate

• APR (nominal): The annual percentage rate your lender quotes (e.g., 7%).
• Periodic rate (r): APR divided by the number of payments per year (12 for monthly, 26 for bi-weekly, 52 for weekly, 1 for yearly).
• Effective annual rate (EAR): Accounts for compounding: EAR = (1 + APR/paymentsPerYear)^{paymentsPerYear} − 1.

This tool uses the periodic nominal rate based on the selected payment frequency, which aligns with typical principal-and-interest amortization schedules.

Why Your Payment Amount Is “Flat” but Your Interest Isn’t

The fixed payment is computed once, but the interest portion each period equals balance × periodicRate. As the balance drops, so does interest, leaving more of the payment to chip away at principal. Same payment, shifting mix.

Choosing the Right Term and Payment Frequency

• Shorter term → higher payment, much less total interest.
• Longer term → lower payment, but you’ll pay more interest overall.
• Monthly payments are the default expectation for most mortgage and installment loan searches.
• Bi-weekly or weekly payments can fit different cash-flow needs and may reduce interest slightly when the payoff cadence is faster.

Worked Example

Suppose a loan of $10,000 at 6% APR for 24 months (monthly payments). Periodic rate r = 0.06 / 12 = 0.005, total payments n = 24:

Payment A = P·r / (1 − (1 + r)−n) → A ≈ 10000·0.005 / (1 − 1.005−24) ≈ $443.21.

Month 1 interest ≈ $10,000 × 0.005 = $50, principal ≈ $393.21. By Month 24, interest is tiny and you finish at a zero balance.

Common Pitfalls

• Comparing loans by payment only: A longer term can look “cheaper” but cost more in total interest.
• Mismatched payment frequency: If a lender quotes monthly but you compute yearly, the numbers won’t line up. Match the payment frequency.
• Ignoring fees: This tool is pure P&I. If your loan has financed fees, your real payments differ.

Optimization Tips

• Test a shorter term to see how much interest you save.
• Try a modest extra payment such as $100/month to see the estimated interest saved and time saved.
• Compare APRs from multiple lenders; a small APR drop can save a lot over long terms.

Comparison Examples

• 30-year vs 15-year loan: A 15-year term usually has a higher monthly payment but can dramatically reduce lifetime interest.
• Monthly vs bi-weekly payments: Bi-weekly schedules make 26 payments per year, which is similar to 13 monthly half-payments.
• Extra $100/month: Extra principal lowers the balance sooner, so less interest accrues in later periods.
• Shortening your term: Shorter payoff windows reduce the number of interest-charging periods.

Financial Disclaimer

This calculator is for educational estimates only and does not include taxes, insurance, lender fees, variable rates, or prepayment penalties. Confirm loan terms with your lender or financial adviser.

Mini Glossary

• Principal: The amount you borrowed (outstanding balance).
• Interest: The cost of borrowing each period: balance × periodicRate.
• Amortization schedule: A period-by-period breakdown of payment, interest, principal, and remaining balance.