What is an Amortization Schedule Calculator?

Amortization is paying off a debt over time in equal installments. Part of each payment goes towards the loan principal, and part goes towards interest. This loan amortization calculator, also known as an amortization schedule calculator, can help you to determine how much you can afford to borrow, what loan term you need and when it might be wise to refinance.

The loan amortization calculator will help you determine how much each of each monthly payment goes towards the principal of your loan and how much goes to pay off interest. The ratio of principal and interest does not remain the same every month. At the beginning of your loan, more of your money goes towards interest than in later payments. The amount that goes towards principal gradually grows each month as the amount that goes towards interest decreases.

Information in the Loan Amortization Calculator Table

All you need to do is to input the amount of your loan, the number of years of your loan and your interest rate. The calculator will immediately generate a table that includes each month of your loan term.

These columns will be populated in the table:

• Payment Date
• Payment (your monthly payment)
• Principal (how much of your payment went toward paying principal on that date)
• Interest (how much of your payment went toward paying interest on that date)
• Total Interest (total interest paid to date)
• Balance (how much principal you still owe on your loan)

At a glance, this table may look intimidating, but it is easy to use, and it can help you make important financial decisions.

How You Can Use the Loan Amortization Calculator

You can use the information generated in the Amortization Schedule Calculator to quickly determine

• How much you must pay for various balances by adjusting the loan amount box.
• How much extra you need to pay each month to pay off your loan by a specific date by adjusting the loan term box.
• How your monthly payments and loan terms will be affected if you refinance and get a new interest rate by adjusting the loan rate box.

Loan Amount Box

Let’s say you are considering taking out a student loan, or any loan for that matter, and you are not sure about the amount you should borrow. The loan amortization calculator can help you. You want to have enough for school, but you also want to be sure you can keep up your payments. You can plug in your desired loan term and the interest rate you are offered as constants. Then you can plug in various loan amounts to determine your monthly payment.

For example, if you take out a loan at 5% interest for 10 years:

• If you borrow $20,000, your monthly payments will be $212.13.
• If you borrow $25,000, your monthly payments will be $265.13.
• If you borrow $30,000, your monthly payments will be $318.20

Loan Term Box

Perhaps you are sure that you need to borrow $20,000 and you know the interest rate, but you are not sure of the loan term that will enable you to make affordable monthly payments. In this case, you can try variations in the loan term box.

For example, if you borrow $20,000 at 5% interest:

• For a 15 year term, your monthly payments will be $158.16.
• For a 10 year term, your monthly payments will be $212.13.
• For a five year term, your monthly payments will be $377.42.

Loan Rate Box

You may be considering whether to get a federal student loan with all its protections or a private loan at a different interest rate. Or you may be considering refinancing. By plugging in different interest rates, you can see the impact on your monthly payments.

For example, if you borrow $20,000 for 10 years:

• At 3% interest, your monthly payment will be $193.12
• At 5% interest, your monthly payment will be $212.14
• At 7% interest, your monthly payment will be $232.22

What Other Loans Can You Use This For?

Auto Loan Amortization Calculator

You can use this as an Auto Loan Amortization Calculator as well as an Amortization Schedule Calculator for your student loans. Whether you are plugging in fixed student loans figures or auto loan figures, it makes no difference. In both cases, you will be paying more in interest at the beginning of your loan, and more of your payment amount will go towards interest as time goes on.

Home Loan Mortgage Calculator

This amortization calculator can also be used to see your payment for a home loan.

Use Various Combinations in the Loan Amortization Calculator

The examples above change just one variable for the sake of clarity. Of course, your loan calculations may not be that straightforward, which is why you can change multiple variables in getting the information you need. For example, you may want to refinance at a lower rate but for a shorter term. You can compare the variables of the loan you have now to a loan with a lower rate and a shorter term in order to figure out your monthly payments.

Plan and Doublecheck Before Borrowing

Before you borrow or refinance, check with various lenders for the best deal for your individual situation. The Loan Amortization Calculator on this page is a useful tool to help you estimate payments. You will want to thoroughly read all your loan documents before making any kind of loan agreement. Also, talk with your loan servicer, who can help explain your options.