Complete Guide to Amortization Schedules
What is an Amortization Schedule?
An amortization schedule is a complete table of periodic loan payments showing the amount of principal and interest that comprises each payment until the loan is paid off at the end of its term.
Key Components of Loan Amortization
- Principal: Original loan amount
- Interest: Cost of borrowing money
- Payment Frequency: Monthly, bi-weekly, or annual payments
- Term Length: Total duration of the loan
Benefits of Using Our Amortization Calculator
• Visualize principal vs interest payments
• Understand the impact of extra payments
• Calculate payoff date accurately
• Compare different loan scenarios
• Export full payment schedule
How Extra Payments Affect Your Loan
Making additional principal payments can significantly reduce total interest paid and shorten the loan term. Even small regular extra payments can lead to substantial savings over time.
Amortization Calculation Formula
The calculator uses the standard amortization 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.
