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Loan Amortization Calculator

Use this calculator to generate a loan amortization schedule. Enter your loan amount, interest rate, and term to see your monthly payment, total interest paid, and how each payment breaks down between principal and interest.

How to Use

1 Enter the total loan amount you are borrowing.
2 Enter the annual interest rate offered by your lender.
3 Enter the loan term in years.
4 View your monthly payment, total interest, and the principal/interest breakdown.

Formula

Monthly Rate annual_rate / 12 / 100
Num Payments loan_term_years × 12
Monthly Payment loan × [r(1+r)^n] / [(1+r)^n − 1]
Total Interest (monthly_payment × num_payments) − loan_amount
First Payment Interest loan_amount × monthly_rate
First Payment Principal monthly_payment − first_payment_interest

30-Year $200,000 Mortgage at 6.5%

A $200,000 loan at 6.5% annual interest over 30 years results in a monthly payment of $1,264.14. Total payments over 30 years are $455,090, meaning you pay $255,090 in interest — more than the original loan amount. The first payment includes $1,083.33 in interest and $180.81 in principal.

Why It Matters

Understanding amortization helps you see how much of each payment goes toward building equity versus paying interest. This knowledge can guide decisions about making extra payments, refinancing, or choosing shorter loan terms to save on interest.

Who Uses This Calculator?

  • • People comparing loan, mortgage, salary, savings, tax, or investment scenarios before making a money decision.
  • • Homeowners, borrowers, employees, freelancers, and small business owners who need fast estimates without a spreadsheet.
  • • Anyone who wants to understand the inputs, formula, and tradeoffs behind a financial result.

Frequently Asked Questions

What is loan amortization?
Amortization is the process of paying off a loan through regular fixed payments over time. Each payment covers both interest and principal, with the interest portion decreasing and principal portion increasing over the life of the loan.
How can I save on total interest?
You can save on interest by choosing a shorter loan term, making extra principal payments, refinancing at a lower rate, or making bi-weekly payments instead of monthly payments.
Why is so much interest paid early in the loan?
Early in the loan, the outstanding balance is large, so interest calculated on that balance is high. As you pay down principal, less interest accrues and more of each payment goes toward principal.
Should I choose a 15-year or 30-year loan?
A 15-year loan has higher monthly payments but significantly less total interest paid. A 30-year loan has lower monthly payments but costs much more in total interest. Choose based on your monthly budget and long-term financial goals.

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This calculator provides estimates for informational purposes only and is not financial, tax, or legal advice. Consult a qualified professional before making financial decisions.