Free Loan Calculator With Amortization Schedule

The principal is the amount you borrow, not including interest or fees. In this calculator, any financed fees (such as an origination fee) are added to the principal balance, so the amount you actually repay is slightly higher than the cash you receive.

Interest is the cost the lender charges for letting you use their money. It is calculated as a percentage of the remaining balance each month, which is why the interest portion of each payment decreases over time as the balance falls.

Amortization is the process of paying off a loan with a fixed series of payments. Each payment covers the interest that accrued that month plus a portion of the principal. Over time, the principal share grows and the interest share shrinks until the balance reaches zero. In this calculator's $10,000 loan at 5% over 36 months, the first payment of $299.71 splits into about $41.67 of interest and $258.04 of principal, a ratio that gradually reverses as the balance falls. By the final month, almost the entire payment reduces principal rather than interest, which is why paying extra early in the schedule has the biggest impact on the total interest you eventually pay. Some loan types, such as certain adjustable-rate mortgages, allow negative amortization, where a payment can be smaller than the accrued interest and the balance actually grows instead of shrinking, though that does not apply to the fixed-rate loans modeled here.

The calculator divides the annual rate by 12 to get the monthly rate r, then applies the formula: Payment = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the financed amount and n is the number of months. At a 0% rate the payment is simply P ÷ n. Plugging in the calculator's own $10,000 loan at 5% over 36 months gives r = 0.004167 and (1 + r)^36 ≈ 1.161472, so the formula resolves to the $299.71 payment shown in the results summary. The same formula explains why stretching the term to 60 months instead lowers the payment to $188.71: a longer n grows the denominator (1 + r)^n − 1 faster than it grows the numerator, so each individual payment shrinks even though the loan accrues more total interest along the way.

Spreading the same debt over more months reduces each individual payment, but interest continues to accrue on the outstanding balance for longer. On a $10,000 loan at 5%, switching from 36 to 60 months saves $111 per month but adds $533.22 in total interest, from $789.52 to $1,322.74. That extra cost is the price of carrying the same $10,000 balance for 24 more months at 5%, so the gap widens further with any additional stretch in term or increase in rate. If your lender allows extra payments without a prepayment penalty, you can take the lower 60-month payment for cash-flow flexibility and still direct spare income toward the principal using this calculator's Extra Payment field, which cuts the outstanding balance faster and reduces the total interest below the $1,322.74 the plain schedule would otherwise produce. Without that flexibility, the shortest term you can comfortably afford is almost always the cheaper choice over the life of the loan.

An origination fee is a one-time charge the lender applies when issuing the loan, often quoted as a percentage of the loan amount. A 2% fee on a $10,000 loan equals $200. In this calculator it is added to the financed balance and repaid with interest over the full term. On the calculator's $10,000 loan at 5% over 36 months, financing that $200 fee raises the scheduled monthly payment from $299.71 to roughly $305.70 and pushes the total cost of the loan up to $11,005.31, since the fee itself now accrues interest alongside the principal. Not every lender prices the fee this way: some quote a flat dollar amount instead of a percentage, for example a $250 charge on the same $10,000 loan, which works out to 2.5% and should be entered as that equivalent percentage in this calculator's origination field.

An extra payment is money you add on top of your scheduled monthly payment, and it goes entirely toward reducing the principal balance rather than covering interest. Because it is applied straight to principal, the loan carries a smaller balance from that point on, so every later month accrues less interest and the payoff date moves earlier. On the calculator's $10,000 loan at 5% over 36 months, a $100 monthly extra payment reduces the payoff from 36 to 27 months. Unlike the Fees field, which is a flat cost added on top of what you pay regardless of how the loan performs, an extra payment always reduces your total cost, it never increases it.

This calculator finds interest saved by running the same loan twice, once with your extra payment and once without, then comparing the total interest each version accrues. On the $10,000 loan at 5% over 36 months used throughout this page, adding $100 extra every month pays the loan off in 27 months instead of 36, a total of $2,600 in extra principal, and cuts total interest from $789.52 down to $582.72, a saving of $206.81. That saving depends heavily on how early the extra payments start: the same $100 a month starting in month 13 instead of month 1 still pays the loan off early, in 30 months, but only saves $91.12 in interest, because there are fewer remaining months left for the smaller balance to compound its effect. Extra payments made earlier in the schedule, while the interest portion of each payment is still largest, always save more than the same amount made later.

A one-time extra payment applies exactly once, in whichever month you choose. A monthly extra payment applies every month from its start date through payoff, and a yearly extra payment recurs every 12 months from that same start date, for example a single annual bonus applied every year rather than every month. All three reduce principal the moment they apply, so a monthly schedule compounds fastest since it acts every period, while a one-time payment gives the biggest single reduction but only once.

The total cost is the sum of all payments made from the first month to payoff: principal, interest, the origination fee and any recurring fees you entered. Extra payments do not add to this figure. Because they cut the interest that accrues, adding $100 a month in extra payments to the calculator's own $10,000-over-36-months example actually lowers the total cost from $10,789.52 to $10,582.72. It remains the most complete way to compare two loan offers, or two repayment strategies for the same loan, because a lower rate can sometimes be offset by higher fees.

Payoff time is the number of months, or years, until the loan balance reaches zero. For a standard fixed-rate loan with no extra payments, this equals the term you chose. Adding a $100 monthly extra payment to the calculator's own $10,000 loan example shortens payoff from the full 36-month term to 27 months, since the extra amount goes straight to principal each month it applies.

Fees and extra payments do not have to begin on day one of the loan: each gets its own start date, which lets you model a fee that only kicks in later or an extra payment you can only afford to start making after a few months. The start date matters most for extra payments, since money applied to principal earlier in the schedule has more remaining months to keep lowering the interest that accrues. On the calculator's $10,000 loan at 5% over 36 months, a $100 monthly extra payment starting in month 1 saves $206.81 in interest and pays the loan off in 27 months, while the identical $100 a month starting in month 13 instead only saves $91.12 and pays it off in 30 months. A monthly or yearly schedule keeps applying from its start date all the way to payoff, while a one-time payment uses the start date as the single month it happens.

Yes. The Loan start date field accepts a date in the past, so you can enter a loan you are already several months or years into repaying, not just a brand-new one. This does not change the monthly payment or interest formula, which is based only on the amount, rate and term you enter, but it does let you set fee and extra-payment start dates relative to a loan that is already underway rather than assuming everything begins today.

The interest rate is the cost of the borrowed amount expressed as an annual percentage. The APR (Annual Percentage Rate) also includes fees and other costs, giving a fuller picture of the annual borrowing cost. This calculator uses the rate you enter as an annual rate and converts it to a monthly rate for the formula. The gap between the two shows up in this calculator's own $10,000 example: financing a 2% origination fee means you effectively receive $9,800 in usable funds but repay as if you borrowed $10,200 at the stated 5% rate, so the true annualized cost of that money runs higher than 5%, which is exactly what APR is designed to reveal. Because this calculator applies the rate you type directly to the loan formula rather than back-solving an APR from fees, comparing two offers by their advertised rate alone can be misleading when one lender charges higher fees than another.

No. This loan calculator is for informational and planning purposes only and does not constitute financial, tax, legal or investment advice. Actual loan terms depend on lender policies, creditworthiness and jurisdiction. Always consult a qualified financial adviser or lender for decisions involving real credit.