Loans & Mortgages

Amortization Calculator

See how your loan payment breaks down between principal and interest.

Enter any loan's amount, rate, and term to see your monthly payment plus how much of your first payment goes toward principal versus interest.

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Monthly Payment

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First Payment: Principal

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First Payment: Interest

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Total Interest (Life of Loan)

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How to Use This Tool

  1. Enter your loan amount, interest rate, and term.
  2. Click Calculate to see your monthly payment and how your very first payment splits between principal and interest.

Understanding Loan Amortization

Amortization is the process of paying off a loan through regular fixed payments, where each payment covers that period's interest charge plus a portion of the principal. In the early years of a loan, interest makes up a much larger share of each payment than principal — this shifts gradually over time.

Why Early Payments Are Interest-Heavy

Interest is charged on your remaining balance each period. Since your balance is highest at the start of the loan, the interest portion of your payment is also highest then. As the balance shrinks, the interest portion shrinks too, and more of each fixed payment goes toward principal — this is why paying extra toward principal early in a loan has an outsized effect on total interest saved.

Practical Implication

If you're considering making extra principal payments to pay off a loan faster, doing so earlier in the loan term saves significantly more total interest than making the same extra payment later, because it reduces the balance that interest is calculated on for many more remaining periods.

Frequently Asked Questions

Why does more of my payment go to interest at the start?

Interest is calculated on your outstanding balance, which is highest at the beginning of the loan. As you pay down the balance over time, less interest accrues each period, so more of your fixed payment goes toward principal.

Does paying extra early in the loan really make a big difference?

Yes — extra principal payments made earlier reduce the balance that interest accrues on for a longer remaining period, so they save more total interest than the same extra payment made later in the loan.

This calculator is provided for general informational and estimation purposes only. Results should not be treated as professional financial, tax, legal, medical, or engineering advice. Always verify critical calculations with a qualified professional or official source before making decisions.