Amortization Calculator

Calculate your loan payments and view detailed amortization schedules. See exactly how much of each payment goes to principal and interest over the life of your loan. Perfect for auto loans, mortgages, personal loans, and any amortizing debt. Our calculator provides complete payment breakdowns and shows you how interest costs decrease over time as your loan balance is paid down.

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Total Interest: $0.00
Total Cost: $0.00

How Amortization Works

Amortization is the process of paying off debt through regular payments over a set period. Each payment includes both principal (loan amount) and interest. Early in the loan, most of your payment goes toward interest. As time passes, more goes toward principal.

The amortization formula calculates your monthly payment: M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the principal amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments.

Understanding your amortization schedule helps you see the true cost of borrowing and can guide decisions about extra payments or refinancing. Making additional principal payments early can significantly reduce total interest costs.

Frequently Asked Questions

What is an amortization schedule?
An amortization schedule is a complete table showing each loan payment over the life of the loan, breaking down how much goes to principal and interest for each payment.
How is monthly payment calculated?
Monthly payment is calculated using the formula: M = P × r × (1+r)^n / ((1+r)^n − 1), where P is principal, r is monthly interest rate, and n is number of payments.
Why does interest decrease over time?
Interest decreases over time because it's calculated on the remaining loan balance, which gets smaller with each payment as more principal is paid down.
Should I make extra principal payments?
Extra principal payments can save significant interest over the loan term, but consider your other financial priorities and whether you have higher-interest debt to pay off first.
Can I use this for auto loans?
Yes! This calculator works for auto loans, mortgages, personal loans, and any installment loan with fixed payments and interest rate.

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