Amortization Calculator
Generate a full month-by-month amortization schedule. See how extra payments save interest and shorten your loan term. See also Loan Calculator and Mortgage Calculator.
How to Use an Amortization Schedule
An amortization schedule shows every payment over the life of a loan, broken down into principal and interest. Each row represents one month, showing how much of your payment reduces the loan balance (principal) and how much goes to the lender as interest. In the early years, most of each payment is interest. Over time, the balance shifts toward principal. Adding extra payments accelerates this process, reducing total interest and shortening the loan term.
Amortization Formula
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1)
Monthly Interest = Remaining Balance × r
Monthly Principal = EMI − Monthly Interest
New Balance = Previous Balance − Monthly Principal − Extra Payment
Where: P = principal, r = monthly rate, n = total months
Example
Loan: $200,000 at 6% for 30 years, Extra: $100/mo
EMI = $1,199.10
Without extra payments:
Total Interest = $231,676.38 over 360 months
With $100/mo extra:
Total Interest = $185,182.80 over 301 months
Savings: $46,493.58 and 59 months (≈5 years)
Extra Payment Impact Table
| Loan | Rate | Extra/mo | Interest Saved | Time Saved |
|---|---|---|---|---|
| $200,000 / 30yr | 6% | $100 | $46,494 | 59 months |
| $200,000 / 30yr | 6% | $200 | $79,511 | 99 months |
| $200,000 / 30yr | 6% | $500 | $131,554 | 172 months |
| $300,000 / 30yr | 7% | $200 | $100,847 | 82 months |
| $300,000 / 30yr | 7% | $500 | $183,920 | 143 months |
| $400,000 / 30yr | 6.5% | $300 | $134,218 | 82 months |
Frequently Asked Questions
What is an amortization schedule?
An amortization schedule is a complete table of periodic loan payments showing the amount of principal and interest that comprise each payment until the loan is paid off. It helps borrowers understand exactly how their money is allocated over the life of the loan.
How do extra payments reduce interest?
Extra payments go directly toward reducing the principal balance. Since interest is calculated on the remaining balance, a lower balance means less interest accrues each month. This creates a compounding effect — each extra payment saves more than its face value in interest over the remaining loan term.
Should I make extra payments or invest the money?
It depends on your loan rate vs expected investment returns. If your loan rate is 6% and you expect 8% investment returns, investing may be better mathematically. However, paying off debt provides a guaranteed "return" equal to your interest rate and reduces financial risk.
When is the best time to make extra payments?
The earlier the better. Extra payments made in the first few years of a loan save the most interest because the balance is highest. A $100 extra payment in year 1 of a 30-year mortgage saves far more than the same payment in year 20.