Loan Amortization Schedule Calculator
Calculate the fixed monthly payment, total interest, and payoff for an amortizing loan, with a year-by-year balance reference table.
How to use this tool
- Enter the loan amount (principal).
- Enter the annual interest rate (APR).
- Enter the loan term in years.
- Read the monthly payment, total cost, and total interest.
- Use the year-end table to see how the balance shrinks over time.
See your exact monthly payment and how much interest a loan really costs over its full term. The year-by-year table shows how the balance declines and how front-loaded the interest is.
Formula
The fixed monthly payment on an amortizing loan is:
M = P × r ÷ [ 1 − (1 + r)−n ]
where P is the principal, r the monthly rate (annual ÷ 12), and n the total number of monthly payments (years × 12). When the rate is 0%, the payment is simply P ÷ n.
Each month, interest = balance × r is charged first; the remainder of the payment reduces the principal, so later payments pay down more principal.
How it works
Amortization is the process of paying off a loan with equal periodic payments. Although every payment is the same size, its split between interest and principal shifts over time: early on, most of the payment is interest because the balance is large; near the end, almost all of it goes to principal.
This calculator uses the standard fixed-payment formula to find the monthly amount, then derives total cost and total interest. The reference table below shows how the balance falls year by year for the default $200,000 / 6% / 30-year loan, illustrating how slowly principal drops in the first decade.
The model assumes a fixed rate and on-time monthly payments with no extra principal, fees, or escrow. Making additional principal payments shortens the term and cuts total interest substantially.
Worked example
$200,000 loan at 6% over 30 years
- Monthly rate r = 6% ÷ 12 = 0.005.
- Number of payments n = 30 × 12 = 360.
- M = 200000 × 0.005 ÷ [1 − (1.005)−360] = $1,199.10.
- Total paid = $1,199.10 × 360 = $431,676.38.
- Total interest = $431,676.38 − $200,000 = $231,676.38.
Monthly payment $1,199.10 | Total paid $431,676.38 | Total interest $231,676.38 | 360 payments
Year-end balance — $200,000 loan at 6% over 30 years
| Year | Principal paid (yr) | Interest paid (yr) | Balance remaining |
|---|---|---|---|
| 1 | $2,456 | $11,933 | $197,544 |
| 3 | $2,768 | $11,621 | $192,168 |
| 5 | $3,120 | $11,269 | $186,109 |
| 10 | $4,209 | $10,180 | $167,371 |
| 15 | $5,677 | $8,712 | $142,098 |
| 20 | $7,658 | $6,732 | $108,007 |
| 25 | $10,329 | $4,060 | $62,024 |
| 30 | $13,932 | $457 | $0 |
Key terms
- Amortization
- Repaying a loan through scheduled equal payments that cover interest first and then reduce the principal balance.
- Principal
- The outstanding loan balance still owed, separate from the interest charged on it.
- Amortization schedule
- A table listing each payment's split into interest and principal and the remaining balance after it.
- Total interest
- The sum of all interest paid over the life of the loan — total payments minus the original principal.
Frequently asked questions
- How is an amortization schedule calculated?
- Each month, interest equals the current balance times the monthly rate. That interest is subtracted from the fixed payment, and the rest reduces the principal. Repeating this for every month produces the full schedule.
- Why is so much of my early payment interest?
- Interest is charged on the outstanding balance, which is largest at the start. As the balance falls, the interest portion shrinks and more of each payment goes to principal.
- How can I pay less total interest?
- Choose a shorter term, secure a lower rate, or make extra principal payments. Even small additional principal payments early in the loan dramatically cut lifetime interest.