Amortization calculator.
See exactly how a loan is paid off. Enter the amount, rate and term to get the monthly payment and a full year-by-year amortization schedule showing principal, interest and the falling balance.
Amortize your loan
LiveMonthly payment
$1,580
over 30 years
Assumes a fixed rate and equal monthly payments. Estimate for planning, not financial advice. Calculations run in your browser; nothing you enter is stored.
How it works
How an amortization schedule is built
An amortizing loan is repaid in equal payments. Each one covers the interest due on the balance you still owe, and the rest reduces the principal. Because interest is charged on a shrinking balance, the interest part of every payment falls over time while the principal part grows. The schedule lays this out year by year.
For a $250,000 loan at 6.5% over 30 years, the payment is about $1,580 a month, and you pay roughly $318,861 in interest across the full term.
Make it count
Use the schedule.
Read the table
The schedule shows, for every year, how much went to principal, how much to interest, and the balance left. It is the clearest picture of a loan.
Extra early wins
A payment above the scheduled amount goes straight to principal and removes its future interest, which is why early overpayments save the most.
Fixed-rate only
Amortization schedules assume a fixed rate and equal payments. Adjustable rates, interest-only and revolving debt do not amortize this way.
Year by year
Your amortization schedule.
Each row is one year of the loan: the principal you paid down, the interest you paid, and the balance left at the end. Early years are interest-heavy; later years are almost all principal.
| Year | Principal paid | Interest paid | Balance |
|---|
The full guide
The complete amortization guide.
What amortization means, how to read the schedule, and which loans amortize and which do not.
What amortization means
Amortization is the systematic repayment of a loan over time with regular, equal payments. Each payment is split in two: the interest due that period is taken first, and whatever is left reduces the principal you owe. Because interest is charged on the current balance, it gets smaller as the principal falls, which you can watch happen row by row in the schedule.
Mortgages, car loans and most personal loans are amortized this way. The single monthly payment hides a changing split between interest and principal, and the schedule is what makes that split visible.
Reading your amortization schedule
The table above breaks the loan into years. For each one it shows the principal you paid down, the interest you paid, and the balance remaining at the end of that year. Add the principal column to date and you have how much of the loan you have actually repaid; the interest column is the cost of borrowing so far.
In the first years the interest column is large and the balance barely moves. By the final years the principal column dominates and the balance falls quickly. That shape is the same for every fully amortizing loan.
Why early payments are mostly interest
Interest each period is the outstanding balance times the periodic rate, and at the start the balance is at its largest, so the interest slice of the payment is big and little goes to principal. As you chip the balance down, the interest slice shrinks and more of each fixed payment attacks the principal.
This is why paying a little extra early is so powerful. Extra money goes entirely to principal, and removing principal removes all of the future interest that principal would have generated, shortening the loan and cutting its total cost.
What loans are and are not amortized
Fully amortizing loans are built to reach a zero balance by the end of the term, which is what this calculator models. Credit cards are different: they are revolving debt, where the balance carries month to month and the payment can vary, so they do not amortize on a fixed schedule. Interest-only loans pay no principal for a period, and balloon loans leave a large lump sum due at the end, so neither fully amortizes either.
Amortization schedules also assume a fixed rate. An adjustable-rate loan re-amortizes whenever its rate changes, so a single schedule only holds until the next adjustment.
Amortization in business and accounting
Amortization has a second meaning in accounting. There it is the practice of spreading the cost of an intangible asset, such as a patent, copyright, licence or goodwill, across the years it is expected to be useful, rather than expensing it all at once. It is the intangible-asset cousin of depreciation, which does the same job for physical assets like machinery and buildings.
This page handles the loan meaning, the repayment schedule above. If you need the accounting sense, the idea is the same shape: a cost divided smoothly over time instead of landing in a single period.
The formula
No black box.
Here is the math.
Each month the interest is the balance times the monthly rate, and the rest of the fixed payment pays the principal down. Repeat until the balance is zero.
See the mortgage calculator ›# Monthly payment
M = P × [ r(1+r)ⁿ ] / [ (1+r)ⁿ − 1 ]
# each month
interest = balance × r
principal = M − interest
balance = balance − principal
# worked example
$250,000 at 6.5% / 30y → $1,580/moQuestions
Amortization questions.
What is amortization?
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Amortization is the process of paying off a loan over time with regular equal payments. Each payment covers the interest due first and uses the rest to reduce the principal, until the balance reaches zero at the end of the term.
How do I read an amortization schedule?
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Each row is one period and shows the interest paid, the principal paid, and the balance remaining afterwards. Early rows are interest-heavy and later rows are principal-heavy, and the balance falls to zero on the final row.
Why is so much of my early payment interest?
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Interest is charged on the balance you still owe, which is largest at the start, so the interest portion of each payment is big early on. As you pay the loan down, the interest portion shrinks and more of every payment reduces the principal.
Do extra payments change the schedule?
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Yes. Any amount above the scheduled payment goes straight to principal, which shortens the loan and reduces the total interest, with the biggest effect when the extra payments are made early.
What loans are not amortized?
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Credit cards are revolving debt and do not amortize on a fixed schedule. Interest-only and balloon loans do not fully amortize either, and the schedule assumes a fixed rate rather than an adjustable one.
Is this amortization calculator free and private?
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Yes. It is completely free with no sign-up, and every calculation runs locally in your browser, so nothing you enter is stored or sent anywhere.
About the developer
Jean Borg
Jean builds and maintains every calculator on freecalculators.pro from Malta, with a focus on tools that are fast, free and show their working. The amortization calculator uses the standard fixed-payment method and is provided for planning and education, not as personalised financial advice.