Loan Amortization Calculator
Generate a complete month-by-month amortization schedule for any loan. See how extra payments reduce interest and shorten your loan term.
Frequently Asked Questions
What is a loan amortization schedule?
An amortization schedule is a complete table showing every loan payment broken down into its interest and principal components, month by month. Early payments are mostly interest (e.g., Month 1 of a 30-year mortgage might be 80% interest, 20% principal). By the final payment, it flips to nearly all principal. The table also shows the remaining balance after each payment.
How much can extra payments save on a mortgage?
Adding $200/month extra to a $300,000 30-year mortgage at 7% saves approximately $90,000 in total interest and cuts the loan term by about 7 years. Even $100/month extra saves ~$50,000 and shortens by 4 years. Make sure to specify "apply to principal" when sending extra payments.
Why do early loan payments go mostly to interest?
Monthly interest is calculated on the outstanding balance: Interest = Balance × (Annual Rate ÷ 12). In Month 1 of a $300,000 loan at 7%, interest = $300,000 × 0.5833% = $1,750. If the payment is $1,996, only $246 reduces principal. As balance falls over time, less interest accrues and more of each payment goes to principal.
What is negative amortization?
Negative amortization occurs when monthly payments are too small to cover the interest charge — the unpaid interest is added to the loan balance, which grows over time. Some adjustable-rate mortgages (ARMs) and income-driven student loan repayment plans allow this. It is financially dangerous and should be avoided if possible.
How do I use the amortization schedule to decide whether to refinance?
Find your current loan's amortization schedule and note the remaining principal balance. Then calculate the new loan's total interest. Refinancing makes sense if (new total interest + closing costs) < remaining interest on current loan. The break-even point is typically 2–4 years — only refinance if you plan to stay that long.