What is loan amortization?

Loan amortization is the process of paying off a loan through scheduled payments that cover both principal and interest, with each payment gradually reducing the balance to zero.

Amortization Calculator

Estimate monthly payments, total interest cost, and first-year interest for a fully amortizing loan.

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Loan amount ($)

Annual rate (%)

Term (years)

Extra monthly payment ($)

About This Calculator

Amortization is the process of paying down a loan through regular payments that cover both interest and principal. This calculator shows your monthly payment, total interest over the life of the loan, and how much interest you pay in year one — which reveals just how front-loaded the interest cost really is.

Estimates only — not financial, tax, legal, or investment advice. Verify important results with a qualified professional before making decisions.

PMT = P × r / (1 − (1 + r)^−N); year-1 interest = sum of interest charges in first 12 payment periods; extra payment reduces principal each period