Loan Amortization Schedule Calculator
See how any loan pays down over time. Enter principal, rate, and term to get your monthly payment, total interest cost, and a chart showing remaining balance vs. cumulative interest paid year by year.
How to use this tool
- Enter loan amount, annual interest rate and loan term in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your monthly payment and the full breakdown beneath it.
An amortization schedule shows how each payment is split between principal and interest. Early payments are mostly interest; later payments shift toward principal as the balance falls.
Monthly Payment Formula: M = P × r(1+r)n / ((1+r)n−1), where P is the loan amount, r the monthly rate, and n the total number of payments.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Monthly payment (PMT) = P × r × (1 + r)n ÷ [(1 + r)n − 1]
where P = principal, r = monthly interest rate (annual rate ÷ 12), n = total months.
At 0% interest: PMT = P ÷ n. Total interest = Total paid − Principal.
How it works
This calculator applies the standard annuity formula to determine the fixed monthly payment that fully retires a loan over the specified term, then amortizes month by month — splitting each payment into interest (balance × monthly rate) and principal — to track the remaining balance and cumulative interest paid.
Results assume a fixed interest rate and no extra payments; prepayments, variable rates, or fees would alter the schedule.
Worked example
- Loan amount: $12,000; annual rate: 0%; term: 1 year (12 months)
- At 0% interest: monthly payment = $12,000 ÷ 12 = $1,000
- Total paid: $1,000 × 12 = $12,000
- Total interest: $12,000 − $12,000 = $0
Monthly payment: $1,000. Total interest paid: $0. Total amount paid: $12,000.
Common mistakes to avoid
- Using the annual interest rate directly instead of dividing by 12 to get the monthly rate, which drastically overstates each monthly payment.
- Forgetting that the schedule assumes no extra payments — making even one extra payment changes every subsequent interest-to-principal split.
- Ignoring escrow (taxes and insurance) when budgeting from the result; the real monthly outlay is often 20-30% higher than the PMT shown.
Key terms
- Amortization
- The process of paying off a loan through regular fixed payments where each payment covers accrued interest first, with the remainder reducing the principal.
- Principal
- The original loan amount borrowed, before any interest accrues; each payment reduces this balance until it reaches zero at loan maturity.
- Monthly interest rate
- The annual interest rate divided by 12; applied to the remaining balance each month to calculate the interest portion of that month's payment.
- Remaining balance
- The unpaid principal still owed after each payment; this decreases slowly at first (when most of the payment covers interest) and faster later in the loan term.
- Total interest paid
- The sum of all interest charges across every payment; equals (monthly payment × number of months) minus the original principal.
Frequently asked questions
- Why does so much of the early payment go to interest?
- Because your balance is highest at the start, so the interest portion (balance × monthly rate) is large. As the balance falls, each payment covers less interest and more principal.
- Can I use this for a mortgage?
- Yes — enter the mortgage principal, your annual interest rate, and term in years. For extra payment impact use the Extra Mortgage Payment Calculator.