Money · Loans
Loan Amortization Calculator
See how each payment splits between interest and principal over the life of a loan, and how much an extra payment each month could save.
Your result
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How amortization works
Payment = P × r ÷ (1 − (1 + r)−n)
Each month: interest = balance × r; principal = payment − interest P = loan amount, r = APR ÷ 12, n = months. Early payments are mostly interest; later ones are mostly principal.
Each month: interest = balance × r; principal = payment − interest P = loan amount, r = APR ÷ 12, n = months. Early payments are mostly interest; later ones are mostly principal.
Worked example
$200,000 at 6% for 30 years:
- r = 0.005, n = 360 → payment ≈ $1,199.10
- First month: interest = $200,000 × 0.005 = $1,000; principal = $199.10
- Total interest over 30 years ≈ $231,676
- Adding $200/month pays it off in 21 years (252 payments) and saves about $79,800 in interest.
Common questions
Do extra payments really help?
Yes. Extra money goes straight to principal, so every later payment carries less interest. Ask your lender to apply extra payments to principal, and check for prepayment penalties.
Why is so much of my early payment interest?
Interest is charged on the remaining balance, which is largest at the start. As the balance shrinks, more of each payment goes to principal.
For education only. Assumes a fixed rate and payments made on schedule. Your lender's numbers may differ slightly due to rounding and payment timing.