How to use this calculator
- Loan amount. The sum you borrow, or the balance you owe today.
- Interest rate. The yearly rate on the loan.
- Term. The number of years to repay.
- Extra monthly payment (optional). Any amount you plan to pay on top of the required payment each month. Leave it at 0 to see the standard schedule.
The results show the monthly payment, total interest and payoff time. If you enter an extra payment, you also see the interest saved and the time saved. The chart plots the balance with and without the extra payment. The table lists interest paid, principal paid and the ending balance for each year.
Worked example
These are the starting values in the calculator above and the results they give. Change any input to see your own numbers.
- Loan amount
- $300,000
- Interest rate
- 6.5%
- Loan term
- 30 years
- Extra payment per month
- $0
- Monthly payment
- $1,896.20
- Total interest
- $382,633
- Payoff time
- 30 yr
- Total repaid
- $682,633
How amortization is calculated
Amortization means paying off a loan through regular payments that cover both interest and principal. The required payment comes from the standard loan formula and stays the same for the whole term.
The schedule is built one month at a time:
- Multiply the balance by the monthly rate. This is the interest for the month.
- Subtract that interest from the payment. The remainder is the principal paid.
- Subtract the principal paid from the balance.
- Repeat with the new, lower balance.
On a $10,000 balance at a 1% monthly rate, the first month's interest is $100. If the payment is $300, the other $200 reduces the balance to $9,800. Next month, interest is charged on $9,800, so slightly more of the payment goes to principal. Our guide on how amortization works covers this in more detail.
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1); each month: interest = balance × r, principal paid = M + extra − interest- M
- required monthly payment
- P
- loan amount
- r
- monthly interest rate (yearly rate ÷ 12)
- n
- number of monthly payments (years × 12)
- extra
- optional extra monthly payment
How extra payments change the schedule
An extra payment goes straight to principal. That lowers the balance sooner, which lowers the interest charged in every month that follows. The required payment stays the same, so a bigger share of each later payment goes to principal as well. The loan ends early, and the interest you would have paid in those final months is never charged.
A few things to know:
- Extra payments made early in the loan save the most, because they cut the balance while it is largest.
- Small amounts matter over a long term. Compare a few values to see the effect.
- Some loans charge a fee for early repayment. Check your loan terms before paying extra.
If you already have a loan and know your balance and payment, the loan payoff calculator is a quicker way to test extra payments.
Frequently asked questions
What is an amortization schedule?
An amortization schedule is a table that shows how a loan is paid off over time. For each period it lists how much of your payments went to interest, how much went to principal and what balance is left. This calculator groups the schedule by year so you can see the balance fall across the whole term.
Why does the interest portion go down over time?
Interest is charged on the remaining balance, not on the original loan amount. Every payment lowers the balance a little, so the next interest charge is a little smaller. Since the payment stays the same, the part going to principal grows each month. Near the end of the loan, almost the whole payment is principal.
How much can extra payments save on a loan?
It depends on the balance, the rate, the time left and the size of the extra payment. Extra money goes directly to principal, which reduces every later interest charge and shortens the loan. The savings are largest on long loans with higher rates. Enter an extra monthly amount above to see the interest saved and time saved for your loan.
Do extra payments lower my monthly payment?
Usually not. On a standard fixed-rate loan the required payment stays the same. Extra payments shorten the loan instead, so you finish sooner and pay less interest in total. Some lenders will recalculate the payment on request after a large lump sum. That option depends on the lender and the loan agreement.
What is the difference between amortization and simple interest?
Simple interest is a way of charging interest only on the principal. Amortization is a way of repaying a loan with equal payments that cover interest and principal together. Many amortizing loans charge interest on the remaining balance each month, and the schedule shows how each payment is split. The two terms describe different things and often apply to the same loan.
This calculator gives estimates for education only. It does not know your full situation and is not financial advice. Reviewed and updated November 15, 2026.