Compute your monthly loan payment and view a year-by-year amortization graph and a month-by-month transaction schedule.
| Pmt # | Date | Payment | Principal | Interest | Total Interest | Remaining Bal |
|---|---|---|---|---|---|---|
| Please click 'Calculate Payment' to generate schedule. | ||||||
How Loan Amortization is Calculated
Loan amortization is the process of breaking down a large debt into regular monthly installments. To compute the exact monthly payment $M$ for a principal loan balance $P$ at a monthly interest rate $i$ over $n$ total monthly periods, we apply this standard mathematical formula:
M = P * [ i * (1 + i)^n ] / [ (1 + i)^n - 1 ]
During the early periods of a mortgage, the majority of your monthly payments go toward paying off interest accrued on the remaining principal. As the years progress and the outstanding balance decreases, an increasing portion of your payment goes directly toward reducing the principal debt, creating the amortization curve.