How to use the amortization calculator
Enter the loan amount, annual interest rate, and loan term in years. The result shows the fixed monthly payment and overall repayment totals.
This summary assumes equal monthly payment intervals and no extra principal, fees, or rate changes. Compare terms using both the payment and the total interest.
Standard amortizing loan payment
The annual rate is divided by 12 to get a monthly rate and the term in years is multiplied by 12 to get the number of payments.
Total interest equals total scheduled payments minus the original principal. This summary assumes every payment is made on time and the rate does not change.
Example: Daniel separates principal from interest
Daniel borrows $100,000 for 10 years at a fixed annual rate of 6%. The monthly payment is approximately $1,110.21. In the first month, interest is $100,000 × 0.06 ÷ 12 = $500. The remaining $610.21 reduces the principal.
The following month starts with a lower balance, so its interest charge is slightly smaller. This calculator summarizes the repayment totals. For a payment-by-payment schedule, use the Loan Payment Calculator linked below.
How to read an amortization schedule
Each scheduled payment has two loan components: interest for the current period and principal that reduces the balance. The remaining balance after one payment becomes the starting balance for the next period.
The payment can stay fixed while the split changes. That is the defining pattern of a standard fixed-rate amortizing loan: interest generally declines over time and principal generally rises as a share of the payment.
Why early payments contain more interest
Interest is calculated from the outstanding principal. Near the start of the loan, that balance is close to the original amount borrowed, so the interest charge for the period is relatively large.
As principal is repaid, the balance used for later interest calculations becomes smaller. More of the same scheduled payment can then go toward principal, which accelerates the decline in the remaining balance near the end of the term.
Using amortization to compare loan terms
A shorter term compresses repayment into fewer installments. That usually creates a higher monthly payment but can reduce total interest because the balance is outstanding for less time.
A longer term can improve monthly cash flow while increasing lifetime interest. Compare the payment, total interest, and remaining balance at the point when you expect to sell, refinance, or otherwise repay the loan.
Assumptions and limitations
What the estimate assumes
Does not model variable rates, fees, late payments, skipped payments, or escrowed costs.
Important limitation 2
Payment timing is modeled monthly.
Amortization Calculator FAQs
What is an amortized loan?
It is a loan repaid through scheduled payments that cover interest and reduce principal so the modeled balance reaches zero by the end of the term.
Why is more of the early payment interest?
Interest is calculated from the outstanding balance. The balance is largest near the beginning, so the interest portion is usually largest then.
Can a 0% loan be amortized?
Yes. With no interest, the payment is simply the principal divided by the number of scheduled payments.
Is this the same as a mortgage calculator?
The loan math is similar, but a mortgage payment can also include property taxes, homeowners insurance, mortgage insurance, and HOA dues.
What does remaining principal mean?
Remaining principal is the unpaid portion of the original loan balance after scheduled principal payments have been applied. It does not include future interest that has not yet accrued.
Does an amortization schedule include taxes or insurance?
Not in this general loan model. It shows principal and interest only. A mortgage calculator can add recurring housing costs such as property taxes and homeowners insurance.
Why can a lender's schedule differ by a few cents?
Lenders can use different payment dates, day-count rules, and rounding conventions. This calculator uses a monthly fixed-rate model and cent-level display rounding, so small differences can occur.
For planning and educational use. Actual loan statements can differ because of fees, payment timing, rounding, and lender-specific rules.