Amortization Calculator
Calculate loan payments, amortization schedule, and total interest with optional extra payments
Calculate Loan Amortization
Principal amount borrowed
Annual percentage rate (APR)
Number of years for repayment
Additional months (0-11)
How often interest compounds
How often you make payments
Additional payment toward principal each period
Payment Schedule Results
Calculation details: monthly compounding, monthly payments
Periodic rate: 0.0000% per payment period
Total term: 0 months (0 years 0 months)
Example Calculation
30-Year Home Mortgage Example
Loan Amount: $300,000
Interest Rate: 6.5% annual
Loan Term: 30 years (360 months)
Compounding: Monthly
Payment Frequency: Monthly
Calculation Results
Monthly Payment: $1,896.20
Total Payments: $682,632.00
Total Interest: $382,632.00
Interest as % of loan: 127.5%
Common Amortized Loans
Mortgages
Home loans typically 15-30 years
Auto Loans
Vehicle financing 3-7 years
Student Loans
Education financing 10-25 years
Business Loans
Commercial financing varies
Amortization Tips
Early payments go mostly toward interest
Later payments go mostly toward principal
Extra payments reduce total interest significantly
Shorter terms mean higher payments but less interest
Understanding Loan Amortization
What is Amortization?
Amortization is the process of paying off a loan through regular, equal payments over a specified period. Each payment consists of both principal and interest, with the proportion shifting over time.
How Payments Are Structured
- •Early payments: High interest, low principal
- •Later payments: Low interest, high principal
- •Total payment amount remains constant
- •Balance decreases with each payment
Amortization Formula
P = A × [i(1+i)ⁿ] / [(1+i)ⁿ - 1]
- P: Periodic payment amount
- A: Loan amount (principal)
- i: Periodic interest rate
- n: Total number of payments
Extra Payment Benefits
Extra payments go directly toward principal, reducing the loan balance faster and saving significant interest over the loan term.