Loan Amortization Table Calculator and Formula

This loan amortization calculator estimates the monthly payment and total interest for a fixed-rate loan, then shows how each payment is divided between interest and principal over time. Enter the loan amount, annual percentage rate (APR), and term; use the resulting figures to build or check a month-by-month amortization table.

Formula

A standard amortizing loan uses equal monthly payments, with each payment covering that month’s interest first and applying the remainder to principal. The calculator uses:

• Monthly interest rate: r = APR / 1200, where APR is the annual percentage rate entered as a percentage.
• Number of payments: n = loan term in years × 12.
• Monthly payment: M = P × r / [1 − (1 + r)⁻ⁿ].
• Total interest estimate: I = M × n − P.

Here, P is the starting principal in dollars, r is the monthly rate as a decimal, n is the number of monthly payments, and M is the monthly payment in dollars. APR is converted to a monthly rate by dividing by 12 and then by 100. The payment formula assumes a fixed rate and level monthly payments. The calculator displays the payment to cents; the total-interest output uses that displayed payment multiplied by the full number of months, so it is an estimate and may differ slightly from a lender’s schedule when the final payment is adjusted.

Worked Example

Using the calculator’s default inputs: principal P = $20,000, APR = 8%, and term = 5 years.

1. Convert the APR to a monthly decimal rate: r = 8 / 1200 = 0.0066667.
2. Find the payment count: n = 5 × 12 = 60 months.
3. Substitute into the payment formula: M = 20,000 × 0.0066667 / [1 − (1.0066667)⁻⁶⁰].
4. The unrounded payment is approximately $405.53, giving a monthly payment of $405.53 when rounded to cents.
5. Estimate total interest using the rounded payment: I = $405.53 × 60 − $20,000 = $4,331.80.

These are the calculator’s outputs for its defaults. A real schedule can have a slightly different final payment because lenders may calculate interest using specific dates, daily accrual, or other contractual details.

Assumptions

• The interest rate remains fixed for the entire term.
• Payments are made monthly, at the end of each monthly period.
• Interest is modelled monthly using APR divided by 12.
• Fees, taxes, insurance, private mortgage insurance, escrow, and other charges are not included.

How to Create and Read an Amortization Table

An amortization table lists each scheduled payment separately. To create one, calculate the fixed payment first, then repeat the same balance calculation for each month. A basic table usually has columns for payment number, beginning balance, payment, interest, principal, and ending balance.

1. Start with the original loan principal as the first beginning balance.
2. Calculate that month’s interest by multiplying the beginning balance by the monthly rate: interest = beginning balance × r.
3. Calculate principal paid: principal portion = monthly payment − interest.
4. Subtract the principal portion from the beginning balance to get the ending balance.
5. Use that ending balance as the next month’s beginning balance, and repeat until the balance reaches zero.

For the example, the first month’s interest is $20,000 × 0.0066667, or about $133.33. From the $405.53 payment, approximately $272.20 reduces principal, leaving an estimated balance of $19,727.80. In later months, the interest portion generally declines as the balance falls, while more of the level payment goes toward principal. Small differences can arise from rounding each row to cents.

The table’s final row should bring the balance to zero, allowing for a small adjustment in the final payment. If you build a spreadsheet, keep full precision in intermediate calculations and round displayed currency values to two decimal places. Rounding every intermediate value can cause a cumulative discrepancy.

When to Use the Estimate

A schedule can help explain how a fixed-payment loan is expected to decline over time, estimate remaining principal after a particular number of payments, or compare the principal and interest portions of early and later payments. It can also help check whether a quoted payment is broadly consistent with a stated principal, rate, and term. Use the lender’s actual disclosure or account statement for contractual figures; this calculator does not model a lender’s specific accrual conventions.

Before using the result, confirm that the APR and term match the figures you intend to examine. If the rate is variable, the payment or schedule can change when the rate resets, so a fixed-rate table will not describe the entire loan. If a quoted payment includes other charges, it will not match a principal-and-interest-only calculation.

Common Mistakes and Limitations

• Mixing annual and monthly rates: The formula needs a monthly decimal rate. Enter APR as a percentage, such as 8 for 8%, not 0.08.
• Using the wrong term unit: The input is years, and the calculation converts it to months by multiplying by 12.
• Treating total interest as every borrowing cost: The result excludes fees and other charges, even when those costs affect the amount paid overall.
• Assuming every loan amortizes evenly: Interest-only periods, balloon payments, variable rates, irregular payment dates, and payment deferrals require different schedules.
• Expecting exact lender figures: Actual calculations may use daily interest, a different first-period length, or a final-payment adjustment.

Extra payments are also not included in the estimate. An additional principal payment can change the later balance and interest, but its effect depends on when it is made and how the loan terms apply it. To model that scenario accurately, add each extra payment to the appropriate month’s schedule rather than simply subtracting it from total interest.

Frequently Asked Questions

What is an amortization table?
An amortization table is a payment-by-payment schedule showing how much goes to interest and principal and how the outstanding loan balance changes.

How do I calculate the interest portion of a monthly payment?
Multiply the beginning balance for that month by the monthly interest rate. Subtract that interest from the scheduled payment to estimate the principal portion.

Why does the principal portion increase over time?
With a fixed payment and rate, the outstanding balance generally declines. That makes the interest charge smaller, leaving more of each later payment to reduce principal.

Does this calculator include fees or insurance?
No. It estimates principal and interest only. Fees, taxes, insurance, escrow, and similar costs require separate figures.

Why might my lender’s payment differ?
The loan may have different terms or charges, or the lender may use specific day-count, payment-date, rounding, or final-payment rules not represented here.

This result is an estimate, and the lender’s disclosure gives the exact figures.

Related

• Vehicle Loan Amortization Table Calculator
• Amortization Table Formula: Calculate Each Payment
• Personal Loan Amortization Table Calculator

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2