Generate a complete month-by-month loan repayment schedule showing principal paid, interest paid, and remaining balance for every payment.
An Amortization Calculator breaks a loan down into its individual payments over the full repayment term, showing exactly how much of each installment goes toward interest and how much goes toward reducing the principal balance. This is different from a basic loan calculator that only gives you the monthly payment figure, an amortization schedule reveals the changing mix between interest and principal month by month, which is why the outstanding balance falls slowly at first and much faster in the later years of a loan.
The fixed monthly payment is found using the standard amortizing-loan formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. For each period, interest due equals the current outstanding balance multiplied by r, and the principal portion of that month's payment equals the fixed payment M minus that interest amount; the new balance is the old balance minus the principal portion.
Enter the loan amount, the annual interest rate, and the loan term in years or months. The calculator returns the fixed monthly payment and, more importantly, the full period-by-period schedule so you can see how the interest-to-principal ratio shifts as the balance is paid down over time.
Example 1: A loan of 20,00,000 at 8% annual interest over 20 years produces a monthly payment of roughly 16,730, of which the very first installment is about 13,330 interest and only around 3,400 principal, that ratio flips almost completely by the final year of the loan.
Example 2: A shorter 5-year loan of 5,00,000 at 10% annual interest carries a monthly payment near 10,624, with interest starting at about 4,167 in month one and shrinking every month after that as the balance drops.
Why does most of my early payment go to interest? Interest is calculated on the outstanding balance, which is largest at the very start of the loan, so a bigger share of the fixed payment is consumed by interest early on; as the balance shrinks, more of each payment is freed up to reduce principal.
What happens if I make an extra principal payment? Extra payments reduce the outstanding balance immediately, which lowers the interest charged in every subsequent period and can shorten the loan term or reduce the total interest paid, even though the standard monthly installment stays the same.
Does the schedule change if the interest rate is variable? This tool assumes a fixed rate for the full term; if your loan has a variable or floating rate, the schedule will need to be recalculated from the point the rate changes using the new remaining balance and remaining term.
How is the total interest paid over the loan calculated? It is simply the sum of the interest portion across every single payment in the schedule, which can be found by adding up the number of payments multiplied by the fixed installment and subtracting the original principal.
Why do two loans with the same rate but different terms have very different total interest? A longer term spreads the principal over more payments, which lowers the monthly amount but keeps a larger balance outstanding for longer, so significantly more total interest accumulates compared with a shorter, higher-payment loan.
Can I use this for a car loan as well as a home loan? Yes, the amortization formula is the same for any fixed-rate installment loan, whether it is a mortgage, auto loan, or personal loan; only the principal, rate, and term inputs change.
What is the difference between amortization and simple interest? Simple interest is calculated only on the original principal for the whole term, while amortized interest recalculates on the shrinking balance every period, which is why amortized loans generally charge less total interest for the same nominal rate and principal.
Does the calculator include taxes, insurance, or fees? No, the schedule reflects only principal and interest on the loan itself; property taxes, insurance premiums, and processing fees, if applicable, need to be added separately to get your true total outgoing.
How can I use an amortization schedule to plan for prepayment? By looking at how much of each future payment is principal versus interest, you can identify the point in the schedule where making one or two extra principal-only payments would meaningfully cut down the remaining term, since removing principal early avoids all the interest that balance would otherwise have accrued for the rest of the loan.
Why do lenders prefer amortized loans over interest-only loans? Amortized loans steadily reduce the lender's risk because the outstanding balance shrinks every single period, whereas an interest-only loan leaves the full principal exposed until a final lump-sum repayment, which is why amortized structures are the default for most standard mortgages and personal loans.