See how each payment is applied to principal and interest over the life of the loan.
Period
Starting Balance
Payment
Interest Paid
Principal Paid
Ending Balance
Amortization schedule will appear after calculation.
Understanding Loan Payments and Amortization Schedules
A loan payment and amortization schedule calculator is an essential tool for anyone taking out a loan, whether it's a mortgage, auto loan, or personal loan. It helps you understand the true cost of borrowing and how your payments are structured over time. This calculator not only estimates your monthly payment but also provides a detailed breakdown of how each payment contributes to reducing your principal balance and paying off the accrued interest.
The Math Behind Loan Payments
The calculation for the monthly payment of an amortizing loan is based on the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]</code
Where:
M = Your total monthly payment
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12. For example, a 6% annual rate becomes 0.06 / 12 = 0.005 monthly.
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the number of years in your loan term by 12. For a 30-year loan, n = 30 * 12 = 360.
Example: Let's say you borrow $200,000 (P = 200000) at an annual interest rate of 5.5% (i = 0.055 / 12 ≈ 0.004583) for 30 years (n = 30 * 12 = 360).
Plugging these values into the formula would yield your estimated monthly payment, excluding taxes and insurance.
What is an Amortization Schedule?
An amortization schedule is a table that shows the series of fixed payments you'll make over the life of a loan. For each payment period, it details:
Period: The payment number (e.g., 1st payment, 2nd payment).
Starting Balance: The amount of debt remaining at the beginning of the period.
Payment: The total fixed amount paid (principal + interest).
Interest Paid: The portion of the payment that goes towards interest. This is calculated by multiplying the starting balance by the monthly interest rate (i).
Principal Paid: The portion of the payment that reduces the loan's principal balance. This is calculated by subtracting the interest paid from the total payment (Payment - Interest Paid).
Ending Balance: The amount of debt remaining after the payment has been applied (Starting Balance - Principal Paid).
As you progress through the schedule, you'll notice that the interest paid decreases with each payment, while the principal paid increases. This is because the interest is calculated on a declining balance. Initially, a larger portion of your payment goes towards interest, but over time, more of your payment goes towards paying down the principal, allowing you to build equity faster.
Why Use This Calculator?
Budgeting: Accurately estimate your monthly loan expenses.
Comparison: Compare different loan offers by looking at their terms and estimated payments.
Planning: Understand how making extra payments can accelerate loan payoff and reduce total interest paid.
Financial Literacy: Gain a clearer understanding of how loans work and the impact of interest.
function calculateLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var monthlyPaymentResultElement = document.getElementById("monthlyPaymentResult");
var totalPrincipalResultElement = document.getElementById("totalPrincipalResult");
var totalInterestResultElement = document.getElementById("totalInterestResult");
var totalRepaidResultElement = document.getElementById("totalRepaidResult");
var amortizationBody = document.getElementById("amortizationBody");
var amortizationTable = document.getElementById("amortizationTable");
var noScheduleMessage = document.getElementById("noScheduleMessage");
var amortizationTableContainer = document.getElementById("amortizationTableContainer");
// Clear previous results
monthlyPaymentResultElement.textContent = "$0.00";
totalPrincipalResultElement.textContent = "$0.00";
totalInterestResultElement.textContent = "$0.00";
totalRepaidResultElement.textContent = "$0.00";
amortizationBody.innerHTML = '';
noScheduleMessage.style.display = 'none';
amortizationTable.style.display = 'table'; // Ensure table is visible
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTerm) || loanTerm 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) - 1);
} else {
monthlyPayment = loanAmount / numberOfPayments; // Simple division if interest rate is 0
}
var totalInterestPaid = 0;
var currentBalance = loanAmount;
var principalPaidTotal = 0;
for (var i = 0; i < numberOfPayments; i++) {
var interestForPeriod = currentBalance * monthlyInterestRate;
var principalForPeriod = monthlyPayment - interestForPeriod;
// Handle potential rounding issues for the last payment
if (currentBalance - principalForPeriod < 0.01) {
principalForPeriod = currentBalance;
monthlyPayment = interestForPeriod + principalForPeriod; // Adjust final payment
}
currentBalance -= principalForPeriod;
totalInterestPaid += interestForPeriod;
principalPaidTotal += principalForPeriod;
var row = amortizationBody.insertRow();
row.insertCell(0).textContent = (i + 1);
row.insertCell(1).textContent = formatCurrency(loanAmount - principalPaidTotal + principalForPeriod); // Starting balance for this period
row.insertCell(2).textContent = formatCurrency(monthlyPayment);
row.insertCell(3).textContent = formatCurrency(interestForPeriod);
row.insertCell(4).textContent = formatCurrency(principalForPeriod);
row.insertCell(5).textContent = formatCurrency(currentBalance);
}
// Adjust total interest and principal if rounding caused slight discrepancies
var finalTotalRepaid = principalPaidTotal + totalInterestPaid;
monthlyPaymentResultElement.textContent = formatCurrency(monthlyPayment);
totalPrincipalResultElement.textContent = formatCurrency(loanAmount); // Total principal paid is always the original loan amount
totalInterestResultElement.textContent = formatCurrency(totalInterestPaid);
totalRepaidResultElement.textContent = formatCurrency(loanAmount + totalInterestPaid);
}
function formatCurrency(amount) {
return amount.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
}