Loan Amortization Calculator
Compute your exact loan payment at any payment frequency — monthly, bi-weekly, or weekly — and see how adding extra payments shortens your loan. Useful when comparing repayment schedules or planning accelerated payoff.
About this calculator
The standard loan payment formula calculates the fixed periodic payment needed to fully amortize a loan: Payment = P × (r × (1 + r)^n) / ((1 + r)^n − 1), where P is the principal, r is the periodic interest rate (annualRate / 100 / paymentFreq), and n is the total number of payments (term × paymentFreq). An extra payment amount is then added directly to each period's payment, accelerating principal reduction: Total Payment = Payment + extraPayment. Increasing payment frequency (e.g., bi-weekly instead of monthly) effectively makes one extra monthly payment per year, reducing the loan term and total interest. The formula is the same across all frequencies — only r and n change.
How to use
Borrow $25,000 at 5% annual interest over 5 years, paid monthly, with a $50 extra payment. paymentFreq = 12, r = 0.05/12 ≈ 0.004167, n = 60. Base payment = 25,000 × (0.004167 × (1.004167)^60) / ((1.004167)^60 − 1) = 25,000 × (0.004167 × 1.2834) / (1.2834 − 1) ≈ 25,000 × 0.005347 / 0.2834 ≈ $471.78. Add the $50 extra: total payment = $521.78/month. This extra $50 per period reduces your total interest by about $180 and pays off the loan roughly 5 months early.
Frequently asked questions
How does paying bi-weekly instead of monthly save money on a loan?
A bi-weekly schedule means 26 half-payments per year, which equals 13 full monthly payments instead of 12 — effectively one extra full payment annually. That extra payment goes entirely to principal, reducing the balance on which interest accrues. On a $200,000 30-year mortgage at 6%, switching to bi-weekly payments can save over $30,000 in interest and cut roughly 4 years off the term. The savings come purely from the additional principal reduction, not from the frequency itself.
What is the effect of extra loan payments on the total interest paid?
Extra payments reduce the outstanding principal immediately, which lowers the interest charged in every subsequent period. Because interest compounds on the remaining balance, each dollar of early principal reduction saves more than a dollar in future interest. The effect is largest early in the loan when the balance is highest. Even a modest recurring extra payment — say $50/month on a 5-year auto loan — can trim months off the term and save a meaningful amount in interest charges, as illustrated in the example above.
How do I choose the right payment frequency for my loan?
Payment frequency affects both cash-flow convenience and total interest paid. Monthly payments are the most common and easiest to budget around a typical pay cycle. Bi-weekly payments align well with bi-weekly paychecks and provide the bonus of an extra annual payment. Weekly payments offer the maximum interest savings but require disciplined budgeting. Lenders may not always offer all frequencies, and some charge fees for bi-weekly programs — verify terms before switching. Use this calculator to compare the total cost and payoff date across different frequencies.