Loan Amortization Calculator
Visualize your loan payment breakdown over time. See how much of each payment goes toward interest versus principal.
| Year | Principal | Interest | Balance |
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Understanding Loan Amortization
A loan amortization schedule shows how each payment is split between principal and interest over the life of the loan. In the early years, most of your payment goes toward interest. Over time, more goes toward principal as the loan balance decreases.
The Formula
Where M = monthly payment, P = principal, r = monthly interest rate, n = number of payments
Key Insights
Early payments are mostly interest because the loan balance is highest at the start.
Even small extra payments can significantly reduce total interest and shorten the loan term.
A lower interest rate can save tens of thousands in interest over the life of the loan.
Shorter terms have higher monthly payments but much lower total interest costs.
This calculator assumes a fixed-rate loan with monthly compounding. Actual payments may vary slightly due to rounding.