Financial Toolset

Loan Amortization Calculator

Generate detailed amortization schedule with extra payment scenarios

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Methodology & Sources

Mortgage Interest Rates

Auto Loan Rates

Total Interest on Long-Term Loans

Extra Payment Impact

Our amortization calculator uses the standard loan payment formula: M = P[r(1+r)^n]/[(1+r)^n-1], where M is monthly payment, P is principal, r is monthly interest rate, and n is number of payments.

Average 30-year fixed mortgage rates have ranged from 3-7% in recent years, with rates varying based on credit score, down payment, and economic conditions.

Source: Freddie Mac - Primary Mortgage Market Survey

New car loans average 5-7% APR, while used car loans range from 6-10% depending on credit score and vehicle age.

Source: Federal Reserve - Consumer Credit Rates

On a 30-year mortgage, borrowers typically pay 50-100% of the original loan amount in interest, depending on the rate.

Source: CFPB - Understanding Your Loan Estimate

Making one extra mortgage payment per year can reduce a 30-year loan to 26 years and save tens of thousands in interest.

Source: Bankrate - Mortgage Calculator with Extra Payments

Disclaimer: This calculator provides estimated amortization schedules based on the terms you enter. Actual loan terms may include additional costs like PMI, taxes, insurance, and fees not reflected in this calculation. Verify with your lender for exact figures.

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What is Loan Amortization?

Loan amortization is the process of paying off a loan over time through regular payments. Each payment is split between principal (paying down the loan balance) and interest (the cost of borrowing).

Early in the loan, most of your payment goes to interest. As the balance decreases, more goes to principal. This is why extra payments in the early years have such a powerful impact—they reduce the principal that future interest is calculated on.

How Loan Payments Work

Example: $300,000 loan at 6.5% for 30 years

Monthly payment: $1,896

First payment breakdown:

  • • Interest: $1,625
  • • Principal: $271

Payment #180 (halfway through):

  • • Interest: $1,169
  • • Principal: $727

Final payment:

  • • Interest: $10
  • • Principal: $1,886

Total interest paid: $382,633 (128% of the original loan!)

The Power of Extra Payments

Without Extra Payment

With $200 Extra/Month

Extra payments are applied directly to the principal, which reduces the amount of interest charged on future payments. Even small extra payments make a big difference over time.

  • • Monthly payment: $1,896
  • • Total interest: $382,633
  • • Payoff: 30 years

  • • Monthly payment: $2,096
  • • Total interest: $272,478
  • • Payoff: 22 years 4 months
  • • Saves $110,155!

Strategies to Pay Off Your Loan Faster

⚠️ Important Considerations

  1. Make biweekly payments: Instead of one monthly payment, pay half every two weeks. You'll make 13 full payments per year instead of 12.
  2. Round up your payment: If your payment is $1,234, round up to $1,300 or $1,500. The extra goes straight to principal.
  3. Apply windfalls to principal: Tax refunds, bonuses, and gifts can dramatically reduce your loan balance.
  4. Refinance to a shorter term: A 15-year mortgage instead of 30-year has higher payments but much less interest.
  5. Avoid extending your loan: Refinancing to restart the clock can cost you more in the long run, even with a lower rate.

  • Prepayment penalties: Some loans charge fees for paying off early. Check your loan terms before making extra payments.
  • Emergency fund first: Don't pay extra on your loan if you don't have 3-6 months of expenses saved.
  • High-interest debt priority: Pay off credit cards (18%+) before extra mortgage payments (6%).
  • Retirement contributions: If your employer matches 401(k) contributions, max that out before extra loan payments.
  • Specify "principal only": When making extra payments, tell your lender to apply them to principal, not future payments.

Key Financial Terms

Understand the essential concepts behind this calculator

Amortization

The process of paying off a loan through regular payments that cover both principal and interest.

Learn more →

Balloon Payment

A large lump-sum payment due at the end of some loans after a period of smaller monthly payments.

Learn more →

Extra Payments (Loan Acceleration)

Additional principal payments beyond the required monthly amount that reduce total interest and shorten loan payoff time.

Learn more →

Loan Term

The length of time you have to repay a loan, typically expressed in months or years.

Learn more →
View all financial terms in our glossary →

Frequently Asked Questions

Common questions about the Loan Amortization Calculator

It’s a table showing each payment split into principal and interest, plus remaining balance over time. Early payments are mostly interest; later payments are mostly principal.
Learn More

Federal Student Loan Interest Rates (2024-2025)

• Undergraduate Direct Loans: 6.53%
• Graduate Direct Unsubsidized: 8.08%
• Direct PLUS Loans: 9.08%
→Source: Federal Student Aid - Interest Rates(2024-2025)

Income-Driven Repayment Plans

• SAVE Plan: 5% of discretionary income (undergraduate), 10% (graduate), 0% below 225% FPL
• PAYE Plan: 10% of discretionary income, capped at 10-year standard
• IBR Plan: 10-15% of discretionary income based on loan date
• ICR Plan: Lesser of 20% discretionary income or fixed 12-year payment
→Source: Federal Student Aid - Income-Driven Repayment Plans(2025)

Public Service Loan Forgiveness (PSLF)

• Requires 120 qualifying monthly payments (10 years)
• Must work full-time for qualifying employer (government/non-profit)
• Remaining balance forgiven tax-free after 120 payments
→Source: Federal Student Aid - PSLF Program(2025)

Average Student Loan Debt (Class of 2023)

• Bachelor's degree borrowers: $28,950 average debt
• Total outstanding student loan debt (U.S.): $1.75 trillion
• Average monthly payment: $200-$299 for most borrowers
→Source: Education Data Initiative - Student Loan Debt Statistics(2023)

Refinancing Rates (2025)

• Private refinancing rates: 4.5% - 9.5% (varies by credit, term)
• Note: Refinancing federal loans means losing federal protections (IDR, PSLF, forbearance)
→Source: CFPB - Student Loan Refinancing(2025)

Important

Student loan rules change frequently. Always verify current program requirements at StudentAid.gov before making decisions.

⚠️ Important