Loan Amortization Calculator
This calculator helps you understand how your loan payments are broken down over time, showing how much goes towards the principal and interest for each payment.
Understanding Loan Amortization
A loan amortization schedule is a table that shows the amount of each loan payment that goes towards principal and interest, and the remaining balance of the loan after each payment. Over the life of the loan, the proportion of your payment that goes towards interest generally decreases, while the proportion that goes towards the principal increases.
Key Components:
- Loan Amount: The total amount of money borrowed.
- Annual Interest Rate: The yearly interest rate charged on the loan.
- Loan Term: The total length of time over which the loan will be repaid.
- Payment Frequency: How often payments are made per year (e.g., monthly, quarterly, annually).
- Monthly Payment: The fixed amount paid each period to cover both principal and interest.
- Principal Paid: The portion of each payment that reduces the outstanding loan balance.
- Interest Paid: The portion of each payment that covers the cost of borrowing.
- Remaining Balance: The amount of the loan still owed after each payment.
The formula used to calculate the periodic payment (P) is derived from the annuity formula:
P = [r * PV] / [1 - (1 + r)^-n]
Where:
PV = Present Value or the initial loan amountr = Periodic interest rate (Annual Rate / Payments Per Year / 100)n = Total number of payments (Loan Term in Years * Payments Per Year)
The amortization schedule then uses this periodic payment to determine the principal and interest paid for each installment.
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overflow-x: auto; /* For potentially wide tables */
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function calculateAmortization() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var paymentFrequency = parseInt(document.getElementById("paymentFrequency").value);
var resultDiv = document.getElementById("amortizationResult");
resultDiv.innerHTML = "; // Clear previous results
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || isNaN(paymentFrequency) ||
loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0 || paymentFrequency <= 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
var monthlyInterestRate = (annualInterestRate / 100) / paymentFrequency;
var numberOfPayments = loanTermYears * paymentFrequency;
// Calculate periodic payment using the annuity formula
var periodicPayment = (monthlyInterestRate * loanAmount) / (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments));
if (isNaN(periodicPayment) || !isFinite(periodicPayment)) {
resultDiv.innerHTML = 'Could not calculate payment. Please check input values (e.g., very low interest rates or very long terms can cause issues).';
return;
}
var remainingBalance = loanAmount;
var amortizationTable = '
| Payment # | Payment Amount | Principal Paid | Interest Paid | Remaining Balance |
|---|
';
for (var i = 1; i <= numberOfPayments; i++) {
var interestPayment = remainingBalance * monthlyInterestRate;
var principalPayment = periodicPayment – interestPayment;
// Adjust for the last payment to ensure the balance is exactly 0
if (i === numberOfPayments) {
principalPayment = remainingBalance;
periodicPayment = principalPayment + interestPayment; // Recalculate final payment amount
interestPayment = remainingBalance * monthlyInterestRate; // Recalculate interest for final payment
}
// Ensure payments don't go negative due to rounding
if (principalPayment < 0) principalPayment = 0;
if (interestPayment < 0) interestPayment = 0;
if (periodicPayment < 0) periodicPayment = 0;
remainingBalance -= principalPayment;
if (remainingBalance < 0) remainingBalance = 0; // Ensure balance doesn't go negative due to rounding
amortizationTable += '';
amortizationTable += '| ' + i + ' | ';
amortizationTable += '$' + periodicPayment.toFixed(2) + ' | ';
amortizationTable += '$' + principalPayment.toFixed(2) + ' | ';
amortizationTable += '$' + interestPayment.toFixed(2) + ' | ';
amortizationTable += '$' + remainingBalance.toFixed(2) + ' | ';
amortizationTable += '
';
}
amortizationTable += '
';
resultDiv.innerHTML = '
Amortization Schedule
' +
'
Loan Amount: $' + loanAmount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'
Annual Interest Rate: ' + annualInterestRate.toFixed(2) + '%' +
'
Loan Term: ' + loanTermYears + ' Years' +
'
Payments Per Year: ' + paymentFrequency + " +
'
Calculated Periodic Payment: $' + periodicPayment.toFixed(2) + '' +
amortizationTable;
}