What an amortization schedule shows you
Every loan payment is split two ways: part pays down what you borrowed (principal), and part is the cost of borrowing (interest). The schedule above shows that split for every single payment. Notice how, early on, most of your money goes to interest β and only later does it shift to principal.
This is the number most "instant answer" tools hide. Seeing it is what lets you make real decisions: whether to make extra payments, refinance, or choose a shorter term.
How the monthly payment is calculated
We use the standard amortization formula lenders use:
M = P Γ [ r(1+r)βΏ ] / [ (1+r)βΏ β 1 ]
where P is the loan amount, r the monthly rate (APR Γ· 12), and n the number of payments. The last payment is adjusted so the balance lands exactly on zero.
The power of extra payments
Because interest is charged on the remaining balance, any extra amount you pay goes straight to principal and saves interest for the rest of the loan. Enter an extra monthly amount above and the schedule, payoff time, and interest saved all update instantly.
Works for any installment loan
Auto loans, personal loans, student loans, equipment financing β any loan with a fixed rate and equal monthly payments works here. (For a home mortgage, our Mortgage Calculator also factors in down payment.)
Estimates for educational purposes only β not financial advice. Your lender's actual figures may include fees this tool does not model.