Loan Amortization Calculator
Calculate the fixed monthly payment on an amortizing loan, with the option to add an extra payment. Works for mortgages, personal loans, and any fixed-rate installment debt.
Last updated: May 2026
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About this calculator
An amortizing loan is repaid in equal periodic payments that cover both interest and principal, so the balance falls to zero by the end of the term. This calculator uses the standard formula M = P × (c × (1 + c)^n) / ((1 + c)^n − 1), where P is the Principal, c is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of payments (years × 12); it then adds any Extra Payment you choose to make each month. Early in the schedule most of each payment goes to interest because the balance is large; as the balance shrinks, a growing share goes to principal — this shifting split is what 'amortization' describes. Adding even a small extra payment attacks principal directly and can shorten the loan dramatically while saving large amounts of interest, because every dollar of principal removed early avoids years of future interest. Edge cases: a 0% loan reduces to simple division of principal across the payments, and a longer term lowers the monthly payment but raises total interest. The formula assumes a fixed rate and equal payments; it does not by itself show the full payment-by-payment breakdown, escrow items like taxes and insurance, or fees. The monthly figure it returns is the base principal-and-interest payment plus your extra, which is the number that determines how fast the debt disappears.
How to use
Example 1 — a $250,000 loan at 7.2% over 30 years, no extra payment. Enter Principal = 250000, Rate = 7.2, Years = 30, Extra Payment = 0. The monthly payment is $1,696.97. Verify: over 360 payments that totals about $610,900, meaning roughly $360,900 is interest — more than the amount borrowed, which is typical for a long high-rate loan. Example 2 — a $200,000 loan at 6% over 15 years with a $200 extra payment. Enter 200000, 6, 15, 200. The monthly payment is $1,887.71 ($1,687.71 base plus $200 extra). Verify: the shorter term already raises the base payment versus a 30-year loan, and the extra $200 a month pays the loan off even faster while cutting total interest further.
Frequently asked questions
How does loan amortization actually work?
With an amortizing loan you pay the same total amount each period, but the split between interest and principal changes over time. At the start, the outstanding balance is large, so most of your payment goes to interest and only a little reduces the principal. As the balance falls, less interest accrues and more of each payment chips away at the principal, accelerating toward the end. By the final payment the loan reaches exactly zero. This front-loaded interest structure is why paying extra early — when the balance is highest — saves so much more interest than paying extra late.
Why do extra payments save so much interest?
Every extra dollar you pay goes straight to principal, permanently removing it from the balance that future interest is charged on. Because interest compounds over the remaining term, eliminating principal early avoids years of accumulated interest on that amount. On a long mortgage, modest consistent extra payments can cut years off the term and save tens of thousands of dollars. The earlier in the loan you make them, the greater the effect, since the balance — and thus the interest being charged — is largest then. Confirm your lender applies extra payments to principal rather than future scheduled payments.
What is the difference between the interest rate and the total interest paid?
The interest rate is the annual percentage charged on the outstanding balance, while total interest paid is the sum of all interest over the life of the loan in dollars. A seemingly modest rate can produce a staggering total over a long term because it is applied repeatedly to a large balance across hundreds of payments. For example, a 30-year loan can accrue total interest exceeding the original principal. This is why both the rate and the term matter so much, and why shortening the term or paying extra reduces total interest even if the rate is unchanged. Always look at the lifetime cost, not just the monthly payment.
Does this include taxes, insurance, or fees?
No — this calculator returns only the principal-and-interest payment plus any extra payment you add. For a mortgage, your actual monthly outlay also includes property taxes and homeowners insurance (together making PITI), and possibly PMI and HOA dues, which a dedicated mortgage calculator handles. Origination fees, points, and closing costs are also excluded and affect the true cost of borrowing. The amortization figure is the core debt-repayment number, useful for comparing loans and planning payoff, but not your complete housing cost. Add the other items separately to see your full monthly obligation.
When should I NOT use this calculator?
Avoid it for variable-rate or adjustable loans, because it assumes a single fixed rate for the whole term and the payment will change when the rate resets. It is also not suitable for loans with non-standard structures such as interest-only periods, balloon payments, or negative amortization. It does not produce the full payment-by-payment schedule, so if you need to see the exact interest and principal for each month, use a dedicated amortization-schedule tool. And it excludes escrow items and fees, so it is not your complete payment. Use it for fixed-rate installment loans where you want the core monthly payment and the impact of extra payments.