How to use the loan amortization calculator
- Enter the loan amount you are borrowing.
- Enter the interest rate (APR) quoted by your lender.
- Choose the loan term in years.
- Optionally add an extra monthly payment to see how much faster you could repay.
The summary shows your payment, total interest and payoff time. Switch the schedule between yearly and monthly views to see exactly how each payment is split.
Loan payment formula explained
Payment = P × r ÷ [1 − (1 + r)−n]
- P = amount borrowed
- r = monthly rate = annual rate ÷ 12 ÷ 100
- n = total number of monthly payments
Each month, interest = remaining balance × r. The rest of the payment reduces the balance. Repeating this for every month produces the amortization schedule. Our totals are calculated at full precision and only rounded for display, so the yearly figures add up exactly to the loan amount.
Worked example
Borrowing $25,000 at 7.5% for 5 years gives a payment of about $501 per month and roughly $5,057 of interest in total. Adding just $100 a month extra clears the loan about 11 months early and saves roughly $1,000 in interest.
Tips to pay off a loan faster
- Round up your payment — $480 becomes $500 without much pain.
- Use windfalls such as tax refunds or bonuses for lump-sum principal payments.
- Check for prepayment penalties before paying early (rare on most consumer loans).
- Refinance if rates have fallen or your credit has improved.