Amortization Calculator
Calculate your loan payments, view complete amortization schedules, and understand how interest affects your loan over time.
What is Amortization?
Amortization is the process of paying off a debt (often a mortgage, auto loan, or personal loan) through regular payments over time. Each payment is divided between paying interest on the loan balance and reducing the principal amount.
In the early years of a loan, a larger portion of each payment goes toward interest, while in later years, more goes toward the principal. This gradual shift occurs because the interest is calculated on the remaining loan balance, which decreases with each payment.
The Amortization Formula
The formula for calculating equal payments on an amortized loan is:
- A = payment amount per period
- P = principal (initial loan amount)
- r = interest rate per period (annual rate divided by payment frequency)
- n = total number of payments (loan term multiplied by payment frequency)
How to Use This Calculator
- Enter your loan amount (the total amount you're borrowing)
- Input the annual interest rate for your loan
- Set the loan term in years
- Select your payment frequency (monthly, biweekly, etc.)
Important Notes
This calculator provides estimates only. Actual loan terms may vary. Consult with a financial professional for advice specific to your situation.
- This calculator assumes a fixed interest rate for the entire loan term.
- Additional payments or irregular payment patterns are not factored into these calculations.
- Loan fees, closing costs, and other expenses are not included in these calculations.