Loan Amortization Calculator
Enter your loan amount, APR, and term to instantly see your monthly payment and a complete year-by-year amortization schedule showing exactly how every dollar is split between principal and interest.
An amortization calculator breaks any fixed-rate loan into its exact monthly payment and a full payoff schedule — mortgage, auto, personal, or student. On a $25,000 loan at 7% APR over 5 years, the calculator instantly returns a $495.03 monthly payment and shows that you'll pay $2,701.80 in total interest. Nationally, the average 30-year mortgage rate sits at 6.85% and the 15-year at 6.17% (Freddie Mac, January 2026).
bolt Quick Answer
A loan amortization calculator shows your monthly payment and schedules every payment across the full term. On a $25,000 loan at 7% APR over 5 years: monthly payment = $495.03, total interest = $2,701.80, total cost = $27,701.80. The formula is: Payment = P × [r(1+r)^n] / [(1+r)^n − 1], where r is monthly rate and n is total months.
tips_and_updates Key Takeaways
- check_circle Amortization front-loads interest — over 60% of early payments go to interest on long-term loans.
- check_circle Cutting your rate by 1% on a $200,000 30-year mortgage saves ~$43,000 in total interest.
- check_circle Adding $100/month extra principal can shorten a 30-year mortgage by 4–5 years.
- check_circle This amortization calculator works for any loan: mortgage, auto, personal, or student.
- check_circle Current 30-year mortgage rates average 6.85% (Freddie Mac, January 2026).
Calculate Your Monthly Payment & Amortization Schedule
Adjust the loan amount, APR, and term to see your payment and the full year-by-year payoff schedule below.
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list View Full Amortization Schedule (Year by Year) expand_more
| Year | Balance Start | Annual Principal | Annual Interest | Balance End |
|---|
* Estimates based on standard amortization. Actual payments may vary slightly due to rounding.
Why Use an Amortization Calculator?
See Every Dollar
Know exactly how much of each payment goes to interest vs. principal — and how quickly your balance shrinks over time.
Compare Loan Options
Run different rate and term combinations side by side to find the loan structure that minimizes total interest for your budget.
No Credit Impact
All calculations run locally in your browser. No personal data is collected, no soft pull, no hard pull — just instant answers.
How Loan Amortization Works
Loan amortization is the process of spreading a debt into equal periodic payments — typically monthly — that cover both interest and principal. The standard formula used by every US lender is: Payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the principal balance, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments. Every payment is identical, but the internal split shifts over time.
In the early months, the outstanding balance is high, so interest consumes most of each payment. As principal shrinks, less interest accrues each month and more of your payment goes toward equity. On a 30-year mortgage, the "crossover point" — when principal exceeds interest in each payment — typically occurs around year 18 to 20. On a 5-year personal loan, the crossover happens much sooner, around month 20.
By the Numbers
On a $25,000 personal loan at 7% APR over 5 years, the monthly payment is $495.03 and total interest is $2,701.80. On a $400,000 30-year mortgage at 6.85% (Freddie Mac, Jan 2026), the monthly payment is $2,624 and total interest exceeds $544,000 — more than the loan itself. Average personal loan APR: 12.37% (Bankrate, January 2026).
Reading Your Amortization Schedule
An amortization schedule lists every payment period with four key columns: the starting balance, principal paid, interest paid, and ending balance. The year-by-year view in our calculator aggregates monthly data into annual rows — easier to scan for long-term loans like mortgages. Current benchmark rates as of January 2026:
| Loan Type | Avg APR (Jan 2026) | Source |
|---|---|---|
| 30-Year Mortgage | 6.85% | Freddie Mac |
| 15-Year Mortgage | 6.17% | Freddie Mac |
| New Auto Loan | 6.37% | Experian Q4 2025 |
| Personal Loan | 12.37% | Bankrate |
Sources: Freddie Mac Primary Mortgage Market Survey (January 2026); Experian State of the Automotive Finance Market Q4 2025 (released February 2026); Bankrate personal loan rate survey (January 2026).
Strategies to Reduce Total Interest Paid
Your amortization schedule is not fixed. Several strategies let you reduce total interest paid without refinancing. The most powerful is extra principal payments — because every dollar of extra principal reduces future interest on a compounding basis.
On long-term loans like 30-year mortgages, even small extra payments early in the schedule have an outsized effect. This is because you're eliminating future months that are still heavily interest-weighted.
- chevron_right Make extra monthly payments — adding $100/month to a 30-year mortgage can cut 4–5 years off the term and save $40,000+ in interest.
- chevron_right Switch to bi-weekly payments — paying half your monthly payment every two weeks results in 26 half-payments (13 full payments) per year instead of 12, eliminating roughly 4–6 years on a 30-year loan.
- chevron_right Refinance to a lower rate — cutting 1% off a $200,000 30-year mortgage saves approximately $43,000 in total interest, though closing costs (typically 2%–5% of the loan) must be factored in.
- chevron_right Choose a shorter term — a 15-year mortgage at 6.17% vs. a 30-year at 6.85% on a $300,000 loan saves over $200,000 in interest, though the monthly payment is significantly higher.
Before making extra payments, verify your loan has no prepayment penalty — most modern personal loans and mortgages in the US do not, but some older mortgages and certain auto loans still include them. Check your loan agreement or call your servicer to confirm.
Amortization Calculator FAQs
What is an amortization calculator? expand_more
An amortization calculator shows you exactly how each loan payment is divided between principal and interest over the life of the loan. You enter the loan amount, annual interest rate (APR), and term in years, and the calculator produces your monthly payment plus a full schedule showing how your balance decreases month by month or year by year. It works for any fixed-rate loan — mortgage, auto, personal, or student.
Why do early payments mostly go to interest? expand_more
Because interest is calculated as a percentage of the outstanding balance. Early in the loan, your balance is near its maximum, so the interest portion of each payment is large and the principal portion is small. As you pay down the balance each month, less interest accrues and more of each payment reduces principal. This structure is called front-loaded amortization and is standard for all fixed-rate installment loans.
How do extra payments affect an amortized loan? expand_more
Extra payments reduce the principal balance directly, which lowers the interest that accrues in every future period. Because interest compounds on the remaining balance, paying extra early in the loan saves significantly more than paying the same extra amount later. Adding $100 per month extra to a $200,000 30-year mortgage at 6.85% APR can shorten the payoff by roughly 4 to 5 years and save over $40,000 in total interest.
What is a good interest rate for a loan in 2026? expand_more
It depends on loan type and credit score. As of January 2026, the average 30-year mortgage rate is 6.85% and the 15-year is 6.17% (Freddie Mac). The average personal loan APR is 12.37% (Bankrate, January 2026), and the average new auto loan APR is 6.37% (Experian Q4 2025, released February 2026). Borrowers with excellent credit scores (720+) typically qualify for rates well below these averages.
What is the difference between amortized and non-amortized loans? expand_more
An amortized loan has equal monthly payments that cover both principal and interest, with the balance reaching zero at the end of the term. A non-amortized loan — such as an interest-only loan or a balloon mortgage — may have payments that cover only interest for a period, with principal due in a lump sum at maturity. Most mortgages, auto loans, and personal loans in the US are fully amortizing.
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