Amortization Schedule Calculator

Amortization is the process of paying off a loan through regular payments over time. Each payment covers interest accrued plus reduces the principal balance.

Because interest is calculated on the remaining balance, which is highest at the start of the loan. As you pay down principal, less interest accrues and more of your payment goes toward principal.

Negative amortization occurs when your payment is less than the interest accrued, causing the loan balance to increase. This can happen with some adjustable-rate mortgages and income-based repayment plans.

Extra payments reduce the principal faster, which reduces future interest charges and shortens the loan term. Even one extra payment per year on a mortgage can save years and thousands in interest.

Most loans use simple interest on the outstanding balance each period. The monthly payment stays the same but the split between interest and principal shifts — early payments are mostly interest, later payments mostly principal.