Amortization Calculator
See your loan's payment schedule, total interest and effective APR.
Results are estimates for informational purposes only and do not constitute financial, legal, or medical advice.
This free amortization calculator shows exactly how a loan is paid off over time. Enter the loan amount, annual interest rate and term, and it calculates your fixed monthly payment along with a year-by-year breakdown of how much of each payment goes toward principal versus interest — and how the remaining balance shrinks over the life of the loan.
It also calculates the effective APR (Annual Percentage Rate) when you include any upfront fees, such as an origination or arrangement fee. Because fees effectively reduce the amount of money you actually receive while you still repay based on the full loan amount, the true cost of borrowing — the APR — is always slightly higher than the nominal interest rate whenever fees are involved.
Frequently Asked Questions
What is loan amortization?
Amortization is the process of paying off a loan through regular, fixed payments over time, where each payment covers both interest and a portion of the principal, gradually reducing the balance to zero.
Why does more of my payment go to interest at the start?
Interest is calculated on the remaining balance, which is highest at the beginning of the loan. As the balance shrinks with each payment, less interest accrues and more of each fixed payment goes toward principal.
What is the difference between the interest rate and the APR?
The interest rate reflects only the cost of borrowing the principal. The APR (Annual Percentage Rate) also factors in upfront fees, giving a more complete picture of the loan's true annual cost.
How is the effective APR calculated with fees?
The calculator finds the interest rate that would produce the same monthly payment if the loan amount were reduced by the fees you actually paid — since fees mean you received less money but still repay based on the full amount, the effective rate is higher.
Why is my monthly payment fixed but the interest/principal split changes?
For a standard fixed-rate amortizing loan, the total payment stays the same every period, but the calculator constantly recalculates interest on the shrinking balance, so the loan naturally shifts from mostly-interest to mostly-principal over time.
Does paying extra reduce the total interest I pay?
Yes. This calculator shows the standard schedule; making extra principal payments reduces the balance faster, which reduces the interest charged in every subsequent period and shortens the loan.
What loan types use amortization schedules?
Mortgages, auto loans, personal loans and most fixed-term installment loans use amortization schedules. Credit cards and other revolving credit do not follow a fixed amortization schedule.
Why does the yearly summary show declining interest?
Because interest is charged on the outstanding balance, and that balance decreases every year as principal is repaid, the interest portion of each year's payments naturally declines over the life of the loan.
Can I use this calculator for any currency?
Yes. The calculator works with any currency — just enter the loan amount and rate; the results scale proportionally regardless of the currency used.
Is the effective APR always higher than the nominal rate?
When fees are included, yes — the effective APR will always be equal to or higher than the nominal interest rate, since fees increase the real cost of borrowing without changing the amount you actually repay.