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Amortization Calculator
See how a fixed payment is divided between interest and principal across a loan term.
Model the schedule and extra payments
Compare the contractual schedule with an optional recurring extra principal payment.
Baseline versus extra-payment scenario
| Scenario | Monthly payment | Payoff time | Total interest |
|---|---|---|---|
| Contractual | $2,696 | 180 months | $185,367 |
| With extra principal | $2,696 | 180 months | $185,367 |
Annual accelerated schedule
| Year | Payments | Interest | Principal | Ending balance |
|---|---|---|---|---|
| 1 | $32,358 | $20,628 | $11,729 | $288,271 |
| 2 | $32,358 | $19,781 | $12,577 | $275,693 |
| 3 | $32,358 | $18,871 | $13,487 | $262,207 |
| 4 | $32,358 | $17,896 | $14,461 | $247,745 |
| 5 | $32,358 | $16,851 | $15,507 | $232,238 |
| 6 | $32,358 | $15,730 | $16,628 | $215,611 |
| 7 | $32,358 | $14,528 | $17,830 | $197,781 |
| 8 | $32,358 | $13,239 | $19,119 | $178,662 |
| 9 | $32,358 | $11,857 | $20,501 | $158,161 |
| 10 | $32,358 | $10,375 | $21,983 | $136,178 |
| 11 | $32,358 | $8,786 | $23,572 | $112,606 |
| 12 | $32,358 | $7,082 | $25,276 | $87,330 |
| 13 | $32,358 | $5,254 | $27,103 | $60,226 |
| 14 | $32,358 | $3,295 | $29,063 | $31,164 |
| 15 | $32,358 | $1,194 | $31,164 | $0 |
Early payments on a standard amortizing loan contain more interest; principal reduction accelerates later in the term.
How this calculation works
The calculator converts the annual nominal rate to a monthly rate, calculates a level payment over term × 12 periods, and rolls the unpaid principal forward to the selected balance date. With a zero rate, principal is divided evenly across periods. It assumes payments occur monthly at period end and excludes fees, prepayments, skipped payments, and rate changes.
How to interpret the result
A fixed payment contains more interest early because interest is charged on the larger opening balance; principal reduction accelerates later. Total interest assumes the loan is held to maturity. For a refinance or sale decision, focus on the balance at that date rather than lifetime interest alone.
Limitations
Results are educational planning estimates. They do not include every tax, legal, accounting, financing, or business-specific consideration and are not professional advice.
Sources and further reading
Formula and example
Early payments on a standard amortizing loan contain more interest; principal reduction accelerates later in the term.
Common use cases
- Calculate a level monthly payment.
- Estimate remaining principal at refinance or sale.
- Compare rate and term combinations.
- Measure lifetime interest cost.
- Test the effect of a shorter amortization period.
Amortization Calculator FAQ
Why is more interest paid early in the loan?
Interest is calculated on the outstanding principal, which is highest at the beginning of an amortizing loan.
Does this include additional principal payments?
No. The schedule assumes the contractual fixed payment without prepayments.
How is Amortization calculated?
The model assumes a constant annual rate converted to monthly periods and equal monthly payments.
How should I interpret the result?
Total interest shows the financing cost if the loan is held for its full term without extra principal payments.
Why does the balance fall slowly at first?
Interest is calculated on outstanding principal, which is highest near origination. With a level payment, the remainder available for principal is therefore smaller early in the schedule.
Does this model include extra principal payments?
No. It models contractual level payments. Extra principal changes the balance path and usually reduces total interest.
Is the quoted annual rate the same as APR?
Not necessarily. APR may incorporate certain finance charges, while this payment model uses the interest rate entered and excludes fees.