Amortization Schedule Calculator



 
 

Amortization Calculator with Amortization Schedule

This loan amortization calculator figures your loan payment and interest costs at various payment intervals. Simply input the principal amount borrowed, the length of the loan and the annual interest rate and the calculator does the rest. Then, once you are ready click on the "Calculate Amortization Schedule" button at the bottom to create a printable amortization table.

Purchase Price:
Down Payment (if 0 leave blank): $ %
Amount to Finance:
Interest Rate Percentage (APR):
Loan Term:
Payment Type:
Amount Owed:
Interest Rate:
Term:
Payment Type:
Payment:

Amortization: Explained

When a loan is paid equally each month over a period of time, the loan payment is called an amortization. The amortization consists of principal plus the loan interest. The interest on amortized loan is charged upfront. The interest paid in the earlier period is much higher compared to interest paid on the last part of the loan. For an amortized loan, the payment to the principal gradually increases while the payment to interest decreases as you progress in your loan payment even if your monthly amortization is paid equally. If the principal is paid more, the loan period will be paid off fast. The pay off date and amount can be calculated or an amortization table can be created for any loan as long as you know how much is the loan amount, the number of years or months you will be paying the loan and frequency of your payment. An amortization table can be created for any types of loan. But it is commonly used on mortgage and car loans. It is difficult to calculate the amortization table by hand; the amortization schedule calculator will make it easier for you. The above calculator will allow you to print the amortization table that shows how much of your payment is applied to principal and interest for each payment. The amortization table will also determine how much is the running loan balance at the end of each payment.

Disadvantage Of An Amortized Loan

The disadvantage of an amortized loan is that principal balance of your loan will be higher at the early period of your loan since a higher portion of your monthly payment is applied to the interest. For example, in an amortized loan for a car, there is a point where the resale value of the car is lower than the remainder amount of the loan if paid immediately. This is the effect of lower payments to the principal on the early stage of the loan. One can actually avoid this circumstance by increasing the monthly payment. But before you do this, read the disadvantages of increasing your monthly payment and find out if your lender allows you to make extra payments. Check and calculate using the amortization schedule calculator if your can afford the monthly payments. Be sure to also check if the extra payments will be applied to your principal rather than the interest. If not, making extra payments will not give you any advantage.

Can I Pay Off Fast An Amortized Loan?

When your loan is amortized, your lender calculates your equal monthly payments so that you will finish off your loan on the agreed terms. If you want to pay off your amortization fast, you need to increase your principal payments and this comes with several disadvantages.

  • Increased monthly payments means decreased funds available for your other needs, such as education, insurance and other household needs. Before making a decision of shortening your loan payment, review your household budget and ensure that you have enough income to allocate for your amortized loan.
  • Increasing your monthly payment also increases your risk of defaulting your loan payments. If you default several times, your lender may even file a foreclosure of your property and you may lose your home. Missed payments can also drop your credit score, which means that you may have difficulty obtaining loans with low interest rates in the future.
  • Higher payments could decrease the term of your loan but it also takes away your opportunity of creating other investments. Depending on the rate of returns, it is more beneficial if you put your money for investment rather an increased loan payment. If your investment yields a higher return, you earn more dollars compared to the dollar saved from increasing your loan amortization.

Conclusion

An amortization table is a very useful tool for making financial decisions. While calculating your loan amortization by hand or through the use of spreadsheet is difficult, you can instead use the above amortization schedule calculator.

Amortization Schedule Calculator Terms and Definitions

  • Purchase Price – The value of the property or item you want to purchase.
  • Down Payment – The initial amount paid for purchases made on debt.
  • Amount to Finance – Purchase price minus the down payment.
  • Annual Interest Rate – The percentage rate of interest applied to your loan.
  • Loan Term – Number of months or years that you will be paying your loan.

Payment Type – Frequency of your loan payment.

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