Loan Amortization Calculator
An amortization schedule is the month-by-month record of a loan: for each payment, how much went to interest, how much to principal, and what balance remained. The free loan payment calculator above builds the full schedule for any loan, showing the first 12 payments in detail, the last payment, and a yearly summary — and this page explains how to read it.
Reading a schedule teaches you two things. First, the interest is front-loaded: you pay the most interest when the balance is highest, which is at the start. Second, the schedule is a promise: if you pay exactly the monthly amount on time every month, the balance hits zero on the payoff date. Miss a payment, and the interest keeps growing while the balance stands still. The default loan below — $25,000 at 7.5% for 60 months, $500.95 a month — shows the pattern clearly.
How an Amortization Schedule Works
Each month, the lender charges interest on the balance still owed, and the rest of your payment reduces the balance. The monthly payment stays fixed, so as the balance falls, the interest charge falls, and the principal share of the payment rises. The schedule records that shift, payment by payment, from the first payment to the last. On the default loan, the first payment is $156.25 of interest and $344.70 of principal, leaving a balance of $24,655.30. The last payment, number 60, is $3.11 of interest and $497.84 of principal, leaving a balance of $0.00.
The schedule in the calculator shows three views: the first 12 payments in full, the last payment, and a yearly summary. The first 12 payments show the pattern starting; the last payment shows how the loan ends; the yearly summary shows the year-by-year totals. Together they answer the only question that matters about a schedule: how much of each payment is interest, and how much actually reduces what you owe.
Step 1 — Read the first payment
The first payment’s interest is the loan amount times the monthly rate: $25,000 times 0.625% is $156.25. The principal is the payment minus the interest: $500.95 minus $156.25 is $344.70. The balance is the loan amount minus the principal: $25,000.00 minus $344.70 is $24,655.30.
Step 2 — Follow the balance down
Each payment’s interest is the balance times the monthly rate, so it falls a little every month as the balance falls. By payment 12 the interest is $131.80 and the principal is $369.15, and the balance is $20,718.42. The balance falls slowly at first and quickly at the end.
Step 3 — Check the last payment
The last payment closes the loan: $3.11 of interest and $497.84 of principal, leaving $0.00. If the schedule is right, the principal column adds up to the loan amount — $25,000.00 — and the interest column adds up to the total interest — $5,056.92.
Worked Example: The Default Loan Year by Year
The table below is the year-by-year summary of the default loan, $25,000 at 7.5% for 60 months. Each loan year runs from December to the following November, starting with the first payment in December 2026.
| Year | Interest paid | Principal paid | Balance left |
|---|---|---|---|
| Year 1 | $1,729.81 | $4,281.58 | $20,718.42 |
| Year 2 | $1,397.42 | $4,613.97 | $16,104.46 |
| Year 3 | $1,039.22 | $4,972.16 | $11,132.29 |
| Year 4 | $653.22 | $5,358.16 | $5,774.13 |
| Year 5 | $237.25 | $5,774.13 | $0.00 |
In year 1, interest is 29% of what you pay: $1,729.81 of interest against $4,281.58 of principal. By year 5, interest is 4% of what you pay: $237.25 against $5,774.13. The five years of interest add up to $5,056.92, and the five years of principal add up to $25,000.00. The crossover — the year the principal first exceeds the interest — happens in year 1 itself on this loan, but the gap widens every year after that.
How to Use the Amortization Schedule
The schedule is below the result box in the calculator. Use it to answer the questions the headline payment cannot.
- Enter the loan amount, APR, and term. The result box shows the monthly payment, the total paid, the total interest, and the payoff month.
- Read the first 12 payments. The table shows the payment number, the date, the payment, the principal, the interest, and the balance for each of the first 12 months.
- Read the last payment. It shows the final payment’s split and the zero balance that closes the loan.
- Read the yearly summary. It groups the schedule by year, so the front-loading of the interest is visible at a glance.
- Add an extra payment and re-read. The whole schedule recomputes, showing the months saved and the interest saved.
On the default loan, payment 2 is $154.10 of interest and $346.85 of principal, leaving $24,308.45. Payment 6 is $145.34 of interest and $355.61 of principal, leaving $22,899.22. Payment 12 is $131.80 of interest and $369.15 of principal, leaving $20,718.42. Each month the interest falls by a few dollars and the principal rises by the same few dollars — the payment never changes, but its composition does.
What Each Column Means
The schedule has six columns, and each one answers a different question about the loan.
| Column | What it is | What it tells you |
|---|---|---|
| Payment number | Which monthly payment this is | How far through the loan you are |
| Date | The month of the payment | When each payment falls, from the first payment month |
| Payment | The fixed monthly amount | What you pay each month, $500.95 on the default loan |
| Principal | Payment minus interest | How much the balance falls that month |
| Interest | Balance times the monthly rate | What the loan costs that month |
| Balance | What you still owe | How much is left, reaching $0.00 on the last payment |
The balance column is the one to watch when you make extra payments: an extra $50 a month on the default loan leaves a balance of $24,605.30 after payment 1 instead of $24,655.30, and $20,097.36 after payment 12 instead of $20,718.42. The gap widens every month, because the lower balance charges less interest, which leaves more of each payment for principal.
Common Mistakes When Reading a Schedule
Schedules are exact, so mistakes come from reading them wrong.
- Thinking the payment is mostly principal. In month 1 on the default loan, only $344.70 of the $500.95 payment is principal. The rest is interest.
- Ignoring the yearly summary. The month-by-month table is long; the yearly summary shows the front-loading in five rows.
- Forgetting the schedule assumes on-time payments. A missed payment leaves the balance standing still while interest keeps building, and the payoff date moves later.
- Confusing calendar years with loan years. The yearly summary groups by loan year from the first payment month, not by January to December.
- Reading the balance as the amount borrowed. The balance is what you still owe, not what you borrowed — it falls from $25,000.00 to $0.00.
- Assuming extra payments change the payment. They do not change the monthly payment; they shorten the loan and cut the interest.
Where an Amortization Schedule Helps
The schedule is the tool for any decision that depends on the balance over time.
- Extra payments. The schedule shows exactly how much interest an extra $50 a month saves: $564.42 and 6 months on the default loan.
- Refinancing. Compare the remaining balance and the remaining interest on the old loan with the new loan’s schedule.
- Payoff planning. The yearly summary shows the balance at each year-end, so you can plan a payoff date.
- Auto loans. The schedule shows when the balance falls below the car’s value, which is when you stop being upside down.
- Student loans. The schedule shows how interest builds while you study, so the balance at graduation is larger than the amount borrowed.
Tips for Accurate Results
Five habits keep the schedule honest.
- Set the first payment month. The dates in the schedule count forward from the month you enter.
- Check the first payment’s split. Interest should be the loan amount times the monthly rate: $156.25 on the default loan.
- Check the totals. The principal column should add up to the loan amount, and the interest column to the total interest.
- Check the last payment. The balance after the last payment should be exactly $0.00.
- Re-run the schedule after any change. A new rate, term, or extra payment rebuilds every row.
Amortization Quick Answers
The figures people look up most often about amortization schedules.
| Question | Answer |
|---|---|
| First interest on $25,000 at 7.5% | $156.25 |
| First principal on $25,000 at 7.5% | $344.70 |
| Balance after 12 payments | $20,718.42 |
| Last payment interest and principal | $3.11 and $497.84 |
| Total interest over 5 years | $5,056.92 |
Related tools on this site: the main loan payment calculator, the mortgage calculator for a home loan schedule with taxes and insurance, the auto loan calculator for a car loan, and the compound interest calculator for the other side of interest. Bankrate’s loan calculators show the same amortization maths for mortgages.
Frequently Asked Questions
What is an amortization schedule?
It is the month-by-month record of a loan: for each payment, how much went to interest, how much to principal, and what balance remained. The calculator above shows the first 12 payments, the last payment, and a yearly summary.
Why is the first payment mostly interest?
Because the interest is charged on the full balance, which is at its largest in month 1. On a $25,000 loan at 7.5%, the first month’s interest is $156.25 of the $500.95 payment. As the balance falls, the interest falls and the principal share rises.
How much principal do I pay in the first year?
On the default $25,000 loan at 7.5% for 5 years, you pay $4,281.58 of principal and $1,729.81 of interest in year 1, leaving a balance of $20,718.42.
Does an extra payment change the schedule?
Yes. An extra $50 a month on the default loan pays it off in 54 months instead of 60, cuts total interest from $5,056.92 to $4,492.51, and saves $564.42 plus 6 months of payments.
What happens if I miss a payment?
Interest keeps building on the balance, a late fee is usually charged, the payoff date moves later, and the missed payment can be reported to the credit bureaus. If you cannot pay, call the lender before the due date.
Disclaimer: This calculator is for general information only and is not financial advice. Rates shown are reference ranges, not live quotes, and change weekly. The payment shown is principal and interest only and excludes taxes, insurance, fees and PMI. Check your loan offer before borrowing.