Amortization Calculator
There are different calculators on this website that can help with specific types of amortization calculations. The Amortization Calculator can do most of the work, but other calculators might be better suited for more specific cases.
- Mortgage Calculator
- Auto Loan Calculator
- Investment Calculator
- Business Loan Calculator
- Personal Loan Calculator
- FHA Loan Calculator
- Annuity Calculator
What is Amortization?
Amortization describes paying off debt with regular payments. There are two types of amortization.
- The first is when you slowly and systematically repay a loan.
- The second type is when a business pays for something expensive and spreads the value of an asset over long periods.
Paying Off a Loan Over Time
When someone takes out a mortgage, car loan, or personal loan, they usually make monthly payments to the lender, called “amortization.” The amount owed is used to compute interest. That means that part of the monthly payment goes towards the loan’s interest. The remainder is used to reduce the amount of money owed on the loan.
As more of the principal is paid off over time, interest accrues at a lower rate. Check how this works by looking at the amortization table.
What is an amortization calculator?
An amortization calculator is a tool that helps you determine how much of your monthly mortgage payment goes toward your principal and how much goes toward interest. It also shows you the remaining balance on your mortgage after each payment.
How does an amortization calculator work?
An amortization calculator uses your loan amount, interest rate, and loan term to calculate your monthly mortgage payment. It then breaks down each payment to show you the portion going towards principal and interest, as well as the remaining balance on your loan.
Why should I use an amortization calculator?
Using an amortization calculator can help you understand how your mortgage payments are applied to the principal and interest over time. It can also help you decide if making extra payments or refinancing is a good option for you.
Where can I find an amortization calculator?
You can find amortization calculators on many bank or lender websites, as well as on financial planning websites. There are also standalone websites and apps that offer this tool for free.
Are there different types of amortization calculators?
Yes, there are different types of amortization calculators, including basic calculators that show monthly payment breakdowns, as well as more advanced ones that allow you to input extra payments and refinancing options.
Can an amortization calculator help me save money?
Yes, by using an amortization calculator, you can see how making extra payments or refinancing your mortgage can potentially save you money on interest payments and help you pay off your loan faster.