Amortization Calculator
See exactly where your loan payments go each month—how much to principal vs. interest.
Amortization Calculator
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How Amortization Works
Amortization = your loan payment schedule. Each monthly payment covers interest + principal. Early payments are mostly interest. Later payments are mostly principal. An amortization schedule shows you the exact breakdown for every payment over the loan term.
Key insight: Extra payments go straight to principal and save you interest. Even small extra payments early on can knock years off your loan and save thousands in interest.
Frequently Asked Questions
Amortization vs. depreciation?
Amortization = paying off debt in installments. Depreciation = spreading the cost of a tangible asset over its life (accounting concept). In loans, amortization means your payment schedule.
Why so much interest at the beginning?
Interest is calculated on the outstanding balance. Since your balance is highest at the start, more of your payment goes to interest. As you pay down principal, less goes to interest and more to principal.
Can I change my amortization schedule?
Yes. Make extra principal payments (shortens term, lowers interest). Refinance (creates new schedule with different rate/term). Or ask about loan recasting (some lenders recalculate payments after a big principal payment).
Are all loans amortizing?
No. Interest-only loans (pay interest only, principal due later), balloon loans (small payments + big final payment), and revolving credit (credit cards) don't amortize.
How do extra payments help?
Extra payments reduce principal immediately, so less interest accrues going forward. This shortens your loan and saves you money. Biggest impact when made early (when balance is highest).
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