Loan Amortization Calculator
Enter your loan details to see your monthly payment and the full payoff schedule. Add an extra monthly payment to see how much interest you can save.
Finance a business purchase? Invoice your clients professionally.
Whether you're managing business loans or billing clients for financed work, Invovate makes professional invoicing free and instant.
Create a Free Invoice → InvovateLoan Amortization Calculator — Frequently Asked Questions
What is loan amortization?
Loan amortization is the process of paying off a loan through regular scheduled payments. Each payment covers both interest and principal. Early payments are mostly interest; later payments are mostly principal. An amortization schedule shows the exact breakdown for every payment period.
How is a monthly loan payment calculated?
The monthly payment formula is: PMT = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments. For a $150,000 loan at 6.5% for 15 years, this gives $1,307.54/month.
How much interest do extra payments save?
Extra payments directly reduce the outstanding principal, which reduces all future interest charges. On a $150,000 loan at 6.5% over 15 years, an extra $200/month saves approximately $8,000–$12,000 in interest and cuts 1–2 years off the loan term. Use the calculator above to see the exact savings for your loan.
What is the difference between a fixed-rate and variable-rate amortization?
With a fixed-rate loan, the interest rate stays the same for the entire term, so every monthly payment is identical. With a variable-rate loan, the rate can change at intervals (e.g., annually), causing the payment amount to change. This calculator assumes a fixed rate. For variable-rate loans, recalculate at each rate adjustment point.