Amortization Schedule Calculator

To amortize a loan is to pay it off in equal installments, each one part interest and part principal. Interest is charged on the outstanding balance, so early on — when you owe the most — the interest slice is largest and the principal slice is small. As the balance falls, the mix tilts toward principal. The payment stays flat; only the split moves.

Each row sums a year of payments: total interest paid, total principal cleared, and the balance still owed at year end. On a long loan the first years are sobering — most of what you pay is interest — and the crossover to "mostly principal" comes surprisingly late. The chart traces the balance so you can see the curve bend.

Any extra amount applied to the principal early removes every future interest charge that principal would have carried. Because early balances are high, an extra payment in year one does far more than the same amount in year twenty. That is the whole logic behind biweekly payments and lump-sum overpayments.