Amortization Calculator
Understanding Loan Amortization
Loan amortization is the process of paying off a debt over time through regular payments. Each payment consists of both principal and interest, with the proportion changing over the life of the loan.
How Amortization Works
In the early years of a loan, a larger portion of each payment goes toward interest. As the loan balance decreases over time, more of each payment goes toward principal. This calculator helps you understand:
- How much of each payment goes to principal vs. interest
- How extra payments can affect your loan term and total interest
- Your remaining balance at any point during the loan
- The total cost of your loan over its full term
Features of This Calculator
- Flexible payment frequencies (monthly, bi-weekly, weekly)
- Extra payment options (monthly or yearly)
- Detailed amortization schedule
- Export functionality for further analysis
- Toggle between monthly and annual views
Tips for Using Extra Payments
Making extra payments can significantly reduce your loan term and total interest paid. Consider these strategies:
- Round up your monthly payment
- Apply tax refunds or bonuses as yearly extra payments
- Set up automatic extra payments to stay consistent
- Check if your loan has any prepayment penalties