Generate loan amortization schedule
Amortization uses the standard loan payment formula: Monthly Payment = P × (r(1+r)^n) / ((1+r)^n - 1), where P is the principal, r is the monthly interest rate, and n is the total number of payments. Each payment is split between interest and principal.
Understanding amortization helps you see exactly how much interest you'll pay over the life of your loan and how extra payments can reduce your total cost. Early payments are mostly interest; later payments are mostly principal.
The amortization table shows each payment number, the principal portion, interest portion, and remaining balance. Watch how the principal portion increases and interest decreases with each payment.
Even small extra payments toward principal early in the loan can significantly reduce total interest paid. Consider biweekly payments (26 half-payments vs 12 full payments) to make an extra payment each year.
Loan amortization is the process of paying off a debt over time through regular, fixed payments. Each payment is split between interest and principal. Early in the loan, most of your payment goes toward interest. Over time, a larger portion goes toward paying down the principal balance. An amortization schedule shows this breakdown for every payment over the life of the loan.
Extra payments go directly toward reducing your principal balance, which means less interest accrues in future months. Even small additional payments early in the loan can save thousands in interest and shave years off your repayment timeline. For example, paying just $100 extra per month on a $200,000 mortgage at 7% can save over $60,000 in interest and pay off the loan nearly 7 years early.
A fixed-rate loan keeps the same interest rate for the entire loan term, so your monthly payment never changes. An adjustable-rate loan (ARM) starts with a lower introductory rate that later adjusts periodically based on market conditions. Fixed rates offer predictability, while ARMs may save money initially but carry the risk of higher payments if rates increase.