Loan Amortization Calculator
Calculate the fixed monthly payment, total interest, payoff time, extra-payment savings, and complete amortization schedule for a standard fixed-rate loan.
Calculator is for informational purposes only. Terms and Conditions
Uses a standard level-payment, fixed-rate monthly amortization model. Interest is calculated each month from the outstanding principal balance; lender-specific accrual, fees, escrow, and payment-posting rules can differ.
Enter the loan details
Enter the principal, annual interest rate, and loan term. Optional extra principal payments can be added below.
Fields marked required must be completed. The scheduled payment assumes equal monthly principal-and-interest payments.
Loan Payment & Payoff Results
Scheduled monthly payment first, followed by total cost, interest, payoff time, and extra-payment savings.
Loan summary
- Total interest—
Show calculation steps Review the payment formula, monthly interest, extra principal, and payoff checks
- Enter valid values to see the complete calculation.
Loan Cost Breakdown
Compare principal to interest using the active extra-payment scenario.
- Enter valid values to populate the chart.
Amortization Schedule
Switch between a compact yearly summary and the full payment-by-payment schedule. Extra principal is shown separately from scheduled principal.
| Enter valid values to generate the schedule. |
Method, Sources, and Assumptions
Calculation basis, authoritative references, limitations, and extra-payment assumptions.
The calculator models a standard fully amortizing fixed-rate loan with equal scheduled monthly principal-and-interest payments. Each month, interest is calculated from the remaining balance and the rest of the scheduled payment reduces principal.
- Interest rate remains fixed for the full modeled repayment period.
- Scheduled payments occur monthly and the nominal annual interest rate is divided by 12 to obtain the periodic rate.
- Optional extra payments are applied directly to principal and do not change the scheduled payment amount.
- Taxes, insurance, escrow, fees, penalties, lender-specific daily-interest accrual, payment timing, and recasting are not modeled.
- Actual lender statements may differ by small amounts because of rounding and contract-specific payment-posting rules.
Calculator guide
Understanding Your Loan Amortization Results
The loan amortization calculator above determines the scheduled monthly principal-and-interest payment for a fixed-rate loan from the loan amount, annual interest rate, and loan term. It also builds yearly and monthly amortization schedules, totals the interest paid, and shows how optional recurring or one-time extra principal payments can change the modeled payoff time and interest cost.
Amortization is the process of paying a loan down through repeated payments. For a standard fixed-rate loan, the scheduled payment stays level while its composition changes: early payments contain more interest because the outstanding balance is larger, and later payments contain more principal as that balance declines. The Consumer Financial Protection Bureau explains the same principal-versus-interest pattern for amortizing loans.
- Minimum inputs
- Loan amount, stated annual interest rate, and loan term.
- Primary output
- Scheduled monthly principal-and-interest payment.
- Model scope
- Fixed rate, monthly periods, fully amortizing repayment.
How to Use the Loan Amortization Calculator
Start with the three required loan terms. Add extra principal only when you want to model an accelerated payoff, then use the result summary and schedule together rather than judging the loan from the monthly payment alone.
-
Enter the amount actually financed
Enter the principal in Loan Amount. Include a fee or other cost only if it is actually financed into the loan balance; do not add taxes, insurance, escrow, or other recurring costs that sit outside principal and interest.
-
Enter the stated annual interest rate
Use the loan’s stated annual interest rate in percent. The calculator converts it to a monthly rate by dividing the decimal annual rate by 12. A 6.5% rate is entered as 6.5, not 0.065.
-
Enter the loan term in years or months
The term selector accepts years or months and converts the term to a whole number of monthly payment periods. For example, 30 years corresponds to 360 scheduled monthly payments.
-
Add extra principal only when it matches your plan
Under Advanced Options — Extra Principal Payments, you can add an extra amount every month, a one-time lump-sum principal payment, or both. For a lump sum, specify the payment number after which the extra amount is applied.
-
Read the payment and cost results together
The primary result is the scheduled monthly payment. The result details also show total interest, total paid, modeled payoff time, interest saved with extras, payments saved, and the first payment’s principal-and-interest split.
-
Inspect or export the schedule
Use Yearly summary for a compact view or Monthly schedule for payment-by-payment detail. The calculator can also download the active amortization schedule as CSV for spreadsheet review.
Loan Amortization Formula and Method
For a fixed-rate loan with equal scheduled monthly payments, the calculator uses the standard present-value relationship for an annuity. It first calculates the level payment, then iterates month by month to split each payment into interest and principal and to apply any extra principal.
Scheduled monthly payment
In plain language: multiply the principal by a payment factor determined by the monthly interest rate and the total number of payments.
The calculator uses \(r=i/12\), where \(i\) is the annual interest rate expressed as a decimal. If the annual rate is exactly 0%, it uses the special case \(M=P/n\), avoiding division by zero.
How each payment is divided
Interest for payment \(k\) equals the beginning balance times the monthly rate. Scheduled principal is the scheduled payment minus that interest. Any modeled extra principal \(E_k\) then reduces the balance further.
- \(M\)
- Scheduled monthly principal-and-interest payment, in dollars.
- \(P\)
- Original loan principal, in dollars.
- \(r\)
- Monthly interest rate as a decimal, calculated as the annual decimal rate divided by 12.
- \(n\)
- Total number of scheduled monthly payments.
- \(B_k\)
- Remaining principal balance after payment \(k\).
- \(I_k\)
- Interest charged for payment period \(k\).
- \(P_k\)
- Scheduled principal paid during payment period \(k\).
- \(E_k\)
- Optional extra principal applied during payment period \(k\).
Loan Amortization Example
Consider a $250,000 fixed-rate loan at 6.5% annual interest for 30 years with no extra principal. These are the example values loaded in the calculator.
Convert the annual rate to a monthly rate
Substitute the values
Result
$1,580.17 per month
The modeled scheduled principal-and-interest payment is approximately $1,580.17. Over 360 scheduled payments with no extras, total interest is approximately $318,861.22 and total principal plus interest paid is approximately $568,861.22.
What extra monthly principal changes
Holding the loan amount, 6.5% interest rate, and 30-year term constant, extra principal reduces the balance earlier. That lowers modeled future interest and can eliminate many scheduled payments.
| Strategy | Monthly outflow | Modeled payoff | Total interest | Interest saved |
|---|---|---|---|---|
| Scheduled payment only | $1,580.17 | 360 payments | About $318,861 | — |
| +$100 principal/month | About $1,680.17 | About 304 payments | About $260,001 | About $58,860 |
| +$250 principal/month | About $1,830.17 | About 250 payments | About $206,265 | About $112,596 |
The comparison is a modeled planning example, not a lender quote. Actual savings depend on when payments post and whether the lender applies additional funds directly to principal.
How to Read an Amortization Schedule
The schedule explains where every modeled dollar goes. The payment can stay level while the interest portion falls and the principal portion rises because interest is recalculated from the remaining balance each month.
| Schedule item | Meaning |
|---|---|
| Beginning balance | Principal still owed before the period’s interest and payment are applied. |
| Scheduled payment | The contractual-style principal-and-interest payment produced by the fixed-rate model. The final scheduled payment may be smaller so the balance ends at zero. |
| Interest | Beginning balance multiplied by the modeled monthly interest rate. |
| Scheduled principal | The portion of the scheduled payment left after that period’s interest is paid. |
| Extra principal | Optional recurring or lump-sum principal applied in addition to the scheduled payment. |
| Total payment | Scheduled payment plus any extra principal applied during that period. |
| Ending balance | Principal remaining after scheduled and extra principal reductions. |
Why early payments contain more interest
Interest is calculated from the outstanding balance. At the beginning, that balance is near its maximum, so \(I_k=B_{k-1}r\) is larger. As principal declines, the same monthly rate is applied to a smaller balance. CFPB describes this shift from more interest early to more principal later in an amortizing loan.
What extra principal changes
Extra principal does not change the calculator’s scheduled payment amount. It lowers the balance sooner, which reduces modeled future interest and can shorten the number of payments. Verify with your lender how extra funds are actually applied.
Scheduled principal ≥ interest
This milestone identifies the first payment where the scheduled principal portion is at least as large as the interest portion. Extra principal is intentionally excluded from the crossover test so the result reflects the contractual-style payment itself.
How loan term changes payment and total interest
Holding the principal at $250,000 and the annual interest rate at 6.5%, a shorter term raises the required monthly payment but reduces lifetime interest. A longer term lowers the monthly payment but keeps the balance outstanding longer.
| Loan term | Monthly P&I | Approx. total interest |
|---|---|---|
| 15 years | About $2,177.77 | About $142,000 |
| 20 years | About $1,863.93 | About $197,000 |
| 30 years | $1,580.17 | About $318,861 |
Common Loan Amortization Mistakes
Most mismatches are caused by input or loan-structure differences rather than the payment equation itself. Check these issues before using the schedule to compare a lender quote or plan an early payoff.
Entering APR instead of the stated interest rate
APR can include origination charges and other fees, while the calculator’s rate input is the annual rate used directly in monthly interest calculations. CFPB explains that APR and interest rate measure different things.
Comparing P&I with a total mortgage payment
This calculator returns principal and interest, not property taxes, homeowners insurance, mortgage insurance, or escrow charges. CFPB notes that a borrower’s total monthly mortgage payment can include these additional costs.
Assuming every lender applies extra money to principal the same way
The model applies entered extras directly to principal after the scheduled payment for that period. Actual payment application depends on the contract and servicer. Confirm how additional funds are applied before relying on modeled savings.
Ignoring prepayment terms
Extra principal may be beneficial in the model, but the loan contract controls whether any prepayment restriction or penalty applies. CFPB explains how prepayment penalties can work.
Expecting the displayed balance to equal a payoff quote
A lender’s payoff amount can include interest through a specific payoff date and other amounts that are not represented by a simple scheduled balance. CFPB distinguishes a payoff amount from a current balance.
Confusing extra principal with a loan recast
In this calculator, extra principal shortens the modeled payoff while the scheduled monthly payment remains unchanged. A lender recast is different: the lender recalculates the scheduled payment using the lower balance and remaining term.
Assumptions and When Results May Differ
The calculator applies the stated monthly fixed-rate model consistently, but it is not a reproduction of every lender’s contract or servicing system. The quality of the comparison depends on whether the real loan follows the same assumptions.
Fixed annual rate
The rate is held constant for the modeled repayment period. Adjustable-rate changes and rate resets are not modeled.
Monthly interest periods
The periodic rate is the nominal annual rate divided by 12. A loan that accrues interest daily or uses another contract-specific convention can produce a different schedule.
Level scheduled payment
The calculated scheduled payment remains constant except for a smaller final payment when necessary to bring the balance exactly to zero.
Extra payments reduce principal
The calculator assumes modeled extras are applied directly to principal after the scheduled payment and do not trigger a recast, fee, or different payment-allocation rule.
Principal and interest only
Taxes, insurance, escrow, lender fees, late charges, and other non-amortized costs are not added to the scheduled payment.
No skipped or irregular payments
The model uses continuous monthly repayment. Deferrals, missed payments, changes in due dates, capitalized interest, and other servicing events are outside its scope.
Sources and Calculation Check
The calculator method was checked against the standard fixed-payment amortization relationship and independently recomputed payment by payment. CFPB guidance is used here for borrower-facing definitions, APR distinctions, mortgage-payment components, and prepayment cautions.
- CFPB — What is amortization and how could it affect my auto loan? — Supports the principal-versus-interest pattern in an amortizing loan and the effect of loan term on payment and lifetime interest.
- CFPB — What is the difference between a loan interest rate and the APR? — Supports the distinction between the stated interest rate and fee-inclusive APR.
- CFPB — Principal and interest payment versus total monthly mortgage payment — Supports excluding taxes, insurance, mortgage insurance, and escrow from this calculator’s principal-and-interest payment.
- CFPB — What is a prepayment penalty? — Supports the caution to check loan terms before relying on modeled extra-payment savings.
For the worked example, the payment was recomputed from the closed-form payment equation and then independently checked through the first-period interest/principal split and a full 360-period balance schedule. The displayed calculator result rounds the payment to cents while calculations retain additional internal precision.
Loan Amortization FAQ
These questions cover edge cases and practical issues that are not fully answered by the calculator output itself.
Can the final loan payment be different from the regular payment?
Yes. The calculator reduces the final scheduled payment when necessary so the remaining balance reaches zero without an artificial overpayment. Small differences can also arise in real lender schedules because of contract-specific rounding or interest-accrual rules.
Why can my lender’s schedule differ by a few cents?
Different rounding conventions, exact payment dates, daily versus monthly interest accrual, and lender-specific posting rules can create small differences even when the same principal and stated rate are used.
Can I use my current loan balance instead of the original loan amount?
Yes, for a forward-looking estimate. Enter the current principal balance, current fixed rate, and remaining term. The resulting schedule models repayment from that point forward and does not reconstruct prior loan history.
Does an extra principal payment lower my scheduled monthly payment?
Not in this calculator. Extra principal reduces the modeled balance and can shorten payoff time and reduce future interest, while the scheduled payment remains unchanged. A lender recast is a separate process that can recalculate the scheduled payment.
What happens if the loan interest rate is 0%?
The calculator uses the zero-interest relationship \(M=P/n\). Each scheduled payment reduces principal directly, total interest is $0, and the balance reaches zero after the scheduled number of payments unless extra principal pays it off sooner.
Can I use this calculator for an adjustable-rate or interest-only loan?
Not for an exact contract schedule. The calculator assumes one fixed annual rate and fully amortizing monthly payments. Adjustable rates, interest-only phases, balloon payments, negative amortization, and other changing-payment structures require a model that explicitly represents those terms.