How to use the Amortization Calculator
- 1 Enter the loan amount.
- 2 Enter the interest rate and term in years.
- 3 Add an optional extra payment each month.
- 4 Read the payment, total interest and the yearly schedule.
Worked example
A $300,000 loan at 6.5% over 30 years with $200 extra each month. The scheduled payment is $1,896.20. Adding $200 pays the loan off in about 23 years and 1 month instead of 30, and saves about $103,449 of interest. In the first year, only $5,826 goes to principal.
Features
Year-by-year schedule
Principal, interest and balance for every year.
Extra payments
See the payoff date and interest saved.
Any loan
Mortgages, auto loans, personal and student loans.
When to use it
New mortgage
See how slowly principal falls in early years.
Prepaying
Decide between investing and extra payments.
Refinancing
Check the remaining balance at a future date.
Budgeting
Plan around a fixed payment.
Frequently asked questions
What is amortization?
Paying off a loan with equal payments that cover interest and principal. Early payments are mostly interest, later ones mostly principal.
How do extra payments help?
Extra money goes straight to principal, which cuts future interest and shortens the loan.
Is it better to pay extra or invest?
It depends on your loan rate, expected returns, taxes and need for cash.
Do lenders charge prepayment penalties?
Most mortgages do not, and penalties are restricted on qualified mortgages. Check your loan documents.
What is negative amortization?
When payments do not cover interest, so the balance grows. Standard fixed-rate loans do not have it.
Does this include taxes and insurance?
No. It covers principal and interest. Use the mortgage calculator to add escrow.
Why is the first year mostly interest?
Interest is charged on the balance, which is largest at the start.
What is biweekly payment?
Paying half the monthly payment every two weeks makes 26 half-payments, or 13 full payments a year, which pays a 30-year mortgage off several years early.
Does a lump sum help as much as monthly extra?
Yes. Any extra amount applied to principal saves interest, and earlier is better.
Will my payment drop after extra payments?
Usually not. The payment stays the same and the loan ends sooner, unless you ask the lender to recast it.
What is a recast?
Some lenders recalculate your payment after a large lump sum, lowering the monthly amount for a small fee.
How do I see my remaining balance?
Read the balance in the schedule for the year you want, or check your lender's statement.
Does the schedule work for car loans?
Yes. Enter the auto loan amount, rate and term in years, such as 5 for a 60-month loan.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated