Plan Your Loan Repayment with Amortization

Disclaimer: This is an estimate based on simplified assumptions. Consult a financial advisor for personalized loan advice.

Our Loan Amortization Calculator helps you understand how your loan payments reduce your balance over time. Enter your details to see monthly payments, total costs, and a detailed amortization schedule.

How to Use the Loan Amortization Calculator

1. Enter the loan amount (e.g., $20,000) you plan to borrow.
2. Input the annual interest rate (e.g., 5%) for the loan.
3. Specify the loan term in years (e.g., 5 for a 5-year loan).
4. Click Calculate Amortization to view monthly payments, a chart, and an amortization table.

The Logic Behind It

The calculator computes the monthly payment using the formula:
M = P × (r(1 + r)^n) / ((1 + r)^n - 1)
Where:
- M = Monthly Payment
- P = Loan Amount
- r = Monthly Interest Rate (Annual Rate / 12)
- n = Number of Monthly Payments (Loan Term × 12)
The amortization schedule tracks each payment’s principal and interest components, reducing the balance until it reaches zero. The chart shows the loan balance and cumulative interest over time.

Benefits of Using the Loan Amortization Calculator

• Clarity: See how each payment reduces your loan balance.
• Planning: Budget for loan repayments with accurate monthly costs.
• Insight: Understand the split between principal and interest.
• Visualization: Track loan progress with a balance and interest chart.