Understanding your loan's amortization schedule is crucial for financial planning. An amortization schedule breaks down each loan payment into two parts: principal and interest. Over time, as you make payments, the portion going towards the principal increases while the portion going towards interest decreases. This calculator helps you visualize this breakdown, showing your remaining balance after each payment.
When you take out a loan (like a mortgage or auto loan), you agree to repay it over a set period with interest. Amortization is the process of paying off a debt over time through regular, scheduled payments. Each payment you make consists of two parts:
Principal: This is the actual amount you borrowed.
Interest: This is the fee charged by the lender for borrowing the money.
In the early stages of your loan, a larger portion of your payment goes towards interest. As you continue to make payments, the balance of the loan decreases, and subsequently, the amount of interest you owe with each payment also decreases. This means a larger portion of your payment starts going towards the principal.
The loan term is the total duration over which the loan is to be repaid. The payment frequency determines how often you make payments within a year (e.g., monthly, quarterly). The annual interest rate is the percentage charged by the lender on the outstanding loan balance.
Interpreting the Schedule
The generated amortization schedule will show you, for each payment period:
Payment Number: The sequence of your payment.
Beginning Balance: The amount owed at the start of the payment period.
Total Payment: The fixed amount you pay each period.
Interest Paid: The portion of the total payment that covers interest.
Principal Paid: The portion of the total payment that reduces the loan balance.
Ending Balance: The amount owed after the payment is applied.
By reviewing this schedule, you can see how quickly your loan is being paid down and how the balance shifts from interest to principal over time.
";
var currentBalance = loanAmount;
var totalInterestPaidOverall = 0;
var totalPrincipalPaidOverall = 0;
for (var i = 1; i <= numberOfPayments; i++) {
var interestThisPeriod = currentBalance * monthlyInterestRate;
var principalThisPeriod = monthlyPayment – interestThisPeriod;
// Adjust for the last payment to ensure the balance is exactly zero
if (i === numberOfPayments) {
principalThisPeriod = currentBalance;
monthlyPayment = interestThisPeriod + principalThisPeriod;
interestThisPeriod = currentBalance * monthlyInterestRate; // Recalculate interest based on beginning balance before final principal payment
// Ensure final principal payment covers remaining balance
if (currentBalance currentBalance) {
principalThisPeriod = currentBalance;
monthlyPayment = interestThisPeriod + principalThisPeriod;
}
if (principalThisPeriod < 0) principalThisPeriod = 0;
if (interestThisPeriod < 0) interestThisPeriod = 0;
var endingBalance = currentBalance – principalThisPeriod;
// Ensure ending balance doesn't go below zero due to rounding
if (endingBalance < 0.01) {
endingBalance = 0;
principalThisPeriod = currentBalance; // Ensure full principal is paid if balance is almost zero
monthlyPayment = interestThisPeriod + principalThisPeriod;
}
amortizationTableHtml += "
";
amortizationTableHtml += "
" + i + "
";
amortizationTableHtml += "
$" + currentBalance.toFixed(2) + "
";
amortizationTableHtml += "
$" + monthlyPayment.toFixed(2) + "
";
amortizationTableHtml += "
$" + interestThisPeriod.toFixed(2) + "
";
amortizationTableHtml += "
$" + principalThisPeriod.toFixed(2) + "
";
amortizationTableHtml += "
$" + endingBalance.toFixed(2) + "
";
amortizationTableHtml += "
";
currentBalance = endingBalance;
totalInterestPaidOverall += interestThisPeriod;
totalPrincipalPaidOverall += principalThisPeriod;
// Break if balance is zero or less to prevent infinite loops with tiny floating point errors
if (currentBalance <= 0) break;
}
amortizationTableHtml += "