Amortization Calculator
Works for mortgages, car loans, personal loans and student loans. Enter the loan details to see your monthly payment and how each payment splits between principal and interest. Add an extra monthly payment to see the interest you'd save.
Amortization Calculator
Loan payment formula
M = P × i ÷ (1 − (1 + i)−n)P is the amount borrowed, i is the monthly rate (annual rate ÷ 12), and n is the number of payments (years × 12). For $25,000 at 7% over 5 years: i = 0.005833, n = 60, so M = $495.03 a month and $4,701.80 of total interest.
How amortization works
Each month, interest is charged on the balance you still owe. Your fixed payment covers that interest first, and the rest pays down principal. Early on the balance is large, so most of each payment is interest. On a 30-year mortgage at 6.5%, the first payment is about 86% interest. Over time the balance falls, less of each payment goes to interest, and principal is repaid faster and faster.
Ways to pay off a loan faster
- Extra monthly principal: even a small fixed amount compounds into years saved. Enter it above to see the effect.
- One extra payment a year: paying half your payment every two weeks adds up to 13 full payments a year. Make sure your lender applies the extra to principal.
- Lump sums: put tax refunds or bonuses toward principal. Check that your loan has no prepayment penalty first.
- Refinancing: a lower rate reduces total interest, but closing costs can take years to recover. Compare the break-even point.
This calculator is for education and planning only and is not financial advice. Your lender's figures may differ slightly because of rounding and the date interest starts.
Frequently asked questions
How is a monthly loan payment calculated?
M = P × i ÷ (1 − (1 + i)^−n), where P is the loan amount, i is the annual rate ÷ 12, and n is the number of monthly payments. A $300,000 loan at 6.5% for 30 years has a payment of $1,896.20 for principal and interest.
What is an amortization schedule?
A table showing every payment over the life of a loan, split into interest and principal, with the balance left after each one. Early payments are mostly interest. Later payments are mostly principal.
Do extra payments really save money?
Yes. Every extra dollar goes straight to principal, so you stop paying interest on it for the rest of the loan. On a $300,000, 30-year loan at 6.5%, an extra $200 a month saves about $103,000 in interest and pays the loan off nearly 7 years early.
Does this include taxes and insurance?
No. The payment shown is principal and interest only. A mortgage payment usually also includes property tax and homeowners insurance (escrow), and sometimes PMI or HOA dues.
Should I choose a 15-year or 30-year loan?
A 15-year loan has a higher monthly payment but usually a lower rate and far less total interest. A 30-year loan keeps the payment low and flexible. You can still pay extra whenever you want, as long as the loan has no prepayment penalty.
See also
- Compound Interest Calculator: Savings growth with monthly deposits and a year-by-year table.
- Percentage Calculator: Percent of a number, percent change, and increase or decrease by a percent.
- Date Calculator: Days between two dates, or add and subtract days from a date.
Last updated: November 4, 2026