Loan Amortization Calculator

Amortization is the process of paying off a debt with a series of fixed, equal payments over time. Each payment is split between interest on the outstanding balance and a reduction of the principal, and because the balance shrinks every month, the split shifts steadily from mostly interest toward mostly principal.

This calculator builds the full amortization schedule for any installment loan, whether a personal loan, business loan, or student loan: the fixed payment, the interest-versus-principal breakdown for every period, the running balance, and the total interest you'll pay over the life of the loan.

How does this calculator work?

Enter the loan amount, the term in years, and the interest rate (APR). The calculator solves for the fixed payment that retires the balance exactly at the end of the term using the standard amortization formula.

It's a solve-for-any-field tool: fix the payment instead and it back-solves the term or rate, which is useful when you know your budget and want to see what it buys.

The schedule shows each period's interest, principal, and remaining balance. Toggle between yearly and monthly views for the level of detail you want, with a totals row pinned at the bottom, and download the table as a CSV to take with you. Early on, most of the payment is interest; near the end, almost all of it is principal.

Add an extra monthly payment to see the schedule compress. Extra money goes entirely to principal, so it removes the most expensive future interest first, and an Interest Savings From Extra Payment card quantifies exactly what it saves.

Worked example

Take a $25,000 loan at 6% APR over 5 years. The amortization formula produces a fixed monthly payment, and the schedule shows how the interest/principal mix evolves.

Loan amount

$25,000

Term / APR

5 yrs / 6%

Monthly payment

$483.32

Month 1: interest / principal

$125.00 / $358.32

Month 60: interest / principal

$2.40 / $480.92

Total interest

$3,999

How the numbers work

The $483.32 payment is what the amortization formula produces for $25,000 at 6%, which is 0.5% per month over 60 months.

In month one, interest is $25,000 × 0.5% = $125.00, so $358.32 reduces principal. By the final month the balance is nearly gone, so interest is just $2.40 and almost the entire $483.32 retires principal.

The 60 payments total $28,999, which is the $25,000 borrowed plus $3,999 in interest.

The payment never changes, but its composition flips: $125 of the first payment is interest, while by the end almost all of it reduces principal. That front-loaded interest is why paying extra early, or shortening the term, saves so much.

Adding just $100/month here retires the loan 11 months early and cuts total interest by $793. See the Interest Savings From Extra Payment results card.

How the amortization formula works

The fixed payment is calculated so that the present value of all payments equals the loan amount at the given periodic rate. In plain terms, the formula finds the single number that, paid every period, draws the balance to exactly zero on the last payment. The periodic interest rate is the APR divided by the number of payments per year, and the number of periods is the term times that same frequency.

Because interest each period is charged only on the remaining balance, the interest portion falls a little every month while the principal portion rises by the same amount, which keeps the total payment constant. That mirror-image relationship is the heart of every amortization schedule.

Ways to pay less interest

Three levers reduce the total interest on an amortizing loan: a shorter term, a lower rate, and extra principal payments. A shorter term raises the monthly payment but slashes total interest because the balance is exposed for less time. Extra payments work even on a fixed term by knocking down the balance ahead of schedule. Some borrowers use a biweekly schedule, which pays half the payment every two weeks and sneaks in one extra full payment per year, shortening the loan without much budget strain.