# Amortization Schedule Calculator Generate an amortization schedule showing principal and interest breakdown for each loan payment. See how extra payments save you money. Free calculator. ## What this calculates See exactly how your loan payments are divided between principal and interest over time. Enter your loan details to generate a complete amortization schedule and see how extra payments can save you thousands in interest. ## Inputs - **Loan Amount** ($) — min 0 — The total amount borrowed. - **Annual Interest Rate** (%) — min 0, max 30 — The yearly interest rate on the loan. - **Loan Term (Years)** — min 1, max 50 — The length of the loan in years. - **Extra Monthly Payment** ($) — min 0 — Optional additional principal payment each month. ## Outputs - **Monthly Payment** — formatted as currency — Your base monthly payment (not including extra). - **Total Interest Paid** — formatted as currency — Total interest over the life of the loan. - **Total Amount Paid** — formatted as currency — Total of all payments (principal + interest). - **Actual Payoff Time** — formatted as text — Payoff time accounting for extra payments. - **Interest Saved with Extra Payments** — formatted as currency — Interest saved by making extra payments. ## Details Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment consists of two parts: interest on the remaining balance and a portion that reduces the principal. In the early years of a loan, most of each payment goes toward interest. Over time, the interest portion shrinks and the principal portion grows. The amortization formula calculates the fixed monthly payment as: M = P[r(1+r)^n] / [(1+r)^n - 1]. For each payment, the interest portion equals the remaining balance multiplied by the monthly rate. The principal portion is the total payment minus the interest. Making extra principal payments can dramatically reduce both the total interest paid and the loan payoff time. Even an extra $100/month on a $250,000 30-year mortgage at 6.5% saves over $50,000 in interest and pays off the loan nearly 6 years early. Extra payments go entirely toward reducing the principal, which reduces the interest accrued in every subsequent month. ## Frequently Asked Questions **Q: What is amortization?** A: Amortization is the process of paying off a loan through regular installments over time. Each payment is divided between interest charges and principal reduction. In the early payments of a long-term loan, the majority goes to interest. As the principal balance decreases, more of each payment reduces the balance. This is why the total interest paid on a 30-year mortgage is often more than the original loan amount. **Q: How do extra payments affect my loan?** A: Extra payments go directly toward reducing your principal balance, which has a compounding effect. With a lower principal, less interest accrues each month, so more of your regular payment goes toward principal as well. On a $250,000 mortgage at 6.5%, paying just $100 extra per month saves roughly $50,000 in interest and shortens the loan by nearly 6 years. The earlier you start making extra payments, the greater the savings. **Q: Why does most of my payment go to interest at first?** A: Interest is calculated on the remaining balance. When your balance is at its highest (the beginning of the loan), the interest charge is largest. On a $250,000 loan at 6.5%, the first monthly interest charge is about $1,354, while the total payment is about $1,580, so only $226 goes to principal. By the last year, the balance is small enough that nearly the entire payment reduces the principal. This is a fundamental feature of how amortization works. **Q: Is it better to make extra payments or refinance?** A: It depends on how much lower your new rate would be and the refinancing costs. Refinancing makes sense if you can reduce your rate by at least 0.5-1% and plan to stay in the home long enough to recoup closing costs (typically 2-5% of the loan). Extra payments make sense when refinancing is not worthwhile but you want to save on interest. You can also combine both strategies: refinance to a lower rate and continue making extra payments. **Q: Can I make biweekly payments instead of monthly?** A: Yes, and it is an effective strategy. Making half your monthly payment every two weeks results in 26 half-payments (or 13 full payments) per year instead of 12. That extra payment each year goes entirely toward principal. On a $250,000 30-year mortgage at 6.5%, biweekly payments save about $62,000 in interest and pay off the loan roughly 5 years early. Check with your lender to ensure they apply biweekly payments correctly. --- Source: https://vastcalc.com/calculators/finance/amortization Category: Finance Last updated: 2026-04-21