What is a loan amortization calculator?
A loan amortization calculator shows how an equal-payment loan is paid down over time. It works out the fixed monthly payment, then tracks how much of the balance is left as each payment splits into interest and principal. This one reports the payment, total interest, and the remaining balance at yearly milestones across the loan term.
How the calculation works
First the monthly payment is found with the standard amortizing-loan formula:
Payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
where P is the loan amount, r is the annual rate ÷ 12 ÷ 100, and n is the term in years × 12. At a 0% rate the payment is simply P ÷ n.
Then the calculator walks through every month:
- Interest for the month = current balance × r.
- Principal repaid = payment − interest.
- New balance = old balance − principal repaid.
At the end of each milestone year (1, 5, 10, 15, 20, 25, 30, and the last year of your term) it records the remaining balance. All figures are rounded to two decimals for display. The term must be between 1 and 40 years and is treated as a whole number of years.
Worked example
A 200,000 loan at an example rate of 6% a year over 30 years (360 payments). The monthly rate is 0.005.
The calculator returns:
- Monthly payment: 1,199.10
- Total interest: 231,676.38
- Total payment: 431,676.38
Here are the first months of the schedule, computed the same way the calculator does internally:
| Month | Interest | Principal | Balance after payment |
|---|---|---|---|
| 1 | 1,000.00 | 199.10 | 199,800.90 |
| 2 | 999.00 | 200.10 | 199,600.80 |
| 3 | 998.00 | 201.10 | 199,399.71 |
| 12 | 988.77 | 210.33 | 197,543.98 |
Over the whole first year you pay 14,389.21, of which 11,933.19 is interest and only 2,456.02 reduces the balance.
The yearly balance overview
The milestone balances below match the calculator's output. The cumulative interest and principal columns come from the same month-by-month walk, added up, and aren't shown in the calculator itself.
| After year | Remaining balance | Principal repaid so far | Interest paid so far |
|---|---|---|---|
| 1 | 197,543.98 | 2,456.02 | 11,933.19 |
| 5 | 186,108.71 | 13,891.29 | 58,054.78 |
| 10 | 167,371.45 | 32,628.55 | 111,263.58 |
| 15 | 142,097.69 | 57,902.31 | 157,935.88 |
| 20 | 108,007.17 | 91,992.83 | 195,791.42 |
| 25 | 62,024.17 | 137,975.83 | 221,754.49 |
| 30 | 0.00 | 200,000.00 | 231,676.38 |
Halfway through the term, after 15 years, less than 30% of the principal has been repaid. In this example the principal part of the payment doesn't overtake the interest part until month 223, in year 19. That is why extra payments early in a loan save the most interest: every amount repaid early stops accruing interest for all the remaining years.
How to use it
- Enter the loan amount.
- Enter the annual interest rate as a percentage.
- Enter the loan term in whole years (1 to 40).
- Click Calculate to get the payment, totals and milestone balances.
The remaining balance after a given year is roughly what you'd need to pay off the loan at that point, before any prepayment charges. Some lenders charge a fee for paying early; the CFPB defines a prepayment penalty as a fee some lenders charge if you pay off all or part of a mortgage early.
Limits of the overview
- Fixed rate only. Adjustable or floating rates change the payment or term when they reset.
- No fees, insurance or taxes. Only principal and interest are modelled.
- No extra payments. The schedule assumes exactly one scheduled payment per month.
- Lender rounding. Lenders usually round each payment to the cent and adjust the final one, so their last payment and balances may differ by small amounts.
Related calculators
- Loan EMI calculator: the same payment with the tenure in months.
- Mortgage calculator: start from a home price and down payment instead of a loan amount.
- Compound interest calculator: how interest grows when it's working for you.
- Budget calculator: check how the payment fits your monthly budget.
Results are estimates for illustration and aren't financial advice; your lender's actual figures may differ.
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