Loan Amortization Calculator
Enter your loan amount, interest rate, and term to get your monthly payment,total interest, and a year-by-year amortization schedule. Add an extra monthly payment to see exactly how much time and interest you save.
| Year | Principal paid | Interest paid | Balance |
|---|
What the results mean
- Monthly payment — the fixed amount covering principal + interest (taxes and insurance not included).
- Total interest — what the loan costs you beyond the amount borrowed. On long loans this often exceeds the principal itself.
- Payoff time / Time saved — extra payments attack principal directly, which shrinks every future interest charge. That compounding-in-reverse is why small extras save so much.
The yearly table shows amortization in action: watch the "Interest paid" column shrink and "Principal paid" grow as the years pass.
How it works
- The standard payment is computed so that equal monthly payments exactly retire the loan by the end of the term.
- Each month: interest = remaining balance × monthly rate; the rest of your payment reduces principal.
- Extra payments go 100% toward principal, which lowers the balance faster — and therefore lowers all future interest.
- The simulation repeats month-by-month until the balance hits zero, then totals everything up.
Formula
Where M = monthly payment, P = loan amount, i = monthly rate (annual ÷ 12), n = total months.
Example
Example: $200,000 loan at 6.5% for 30 years
- Monthly payment: ≈ $1,264 · Total interest: ≈ $255,090
- Add $200/month extra: payoff drops to ~21 years, total interest falls to ≈ $165,000 — saving roughly $90,000 and 9 years.
Use cases
- Mortgage shopping — compare what 6% vs. 7% really costs over 30 years.
- Extra-payment strategy — decide between $100/month extra vs. one lump sum per year.
- Auto & personal loans — same math works for any fixed-rate installment loan.
- Refinance sanity check — see whether a lower rate actually beats your current schedule.
Frequently asked questions
What is loan amortization?
Amortization is the process of paying off a loan in fixed installments. Early payments go mostly toward interest; over time, more of each payment attacks the principal. An amortization schedule shows this shift month by month.
How much do extra payments really save?
A lot. On a typical 30-year mortgage, one extra monthly payment per year can shave roughly 4–5 years off the loan and save tens of thousands in interest. Try the 'extra monthly payment' field above to see your exact numbers.
Does this include property tax and insurance (PITI)?
No — this calculator covers principal and interest only. Mortgages also include property tax, homeowner's insurance, and possibly PMI, which your lender bundles into the payment.
Fixed vs. adjustable rate — which does this assume?
A fixed rate for the whole term. Adjustable-rate loans change over time, so their schedules can't be projected with a single formula.
Why is the first-year interest so high?
Interest is charged on the remaining balance. When the balance is largest — at the start — the interest slice of each payment is largest. As principal shrinks, the interest slice shrinks with it.
Does this work for mortgages outside the US?
Yes, for any fixed-rate loan in any country — the amortization math is universal. Enter your loan amount in your own currency. Note the calculator covers principal and interest only, not local property taxes or insurance.
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Last updated: 2026-10-04 · WebTools Hub