What Is an Amortized Loan?
An amortized loan is repaid through a series of equal periodic installments that cover both interest and principal over a set term. The popular term in finance to describe loans with such a repayment schedule is an amortized loan. The amortization definition can be phrased as "a loan paid off by equal periodic installments over a specified term." Common examples include automobile loans, home mortgages, student loans, and many business loans.
Loan Amortization Schedule
An amortization schedule is a complete table of periodic loan payments, showing the amount of principal and interest that make up each payment until the loan is paid off. In the early periods, a larger portion of each payment goes toward interest; as time passes, more of each payment reduces the principal. This gradual shifting is the core mechanic of amortization.
Our calculator generates the full schedule for your loan, letting you see exactly how much interest you pay each period and what your remaining balance is after every payment.
Amortization Formula
The periodic payment for an amortized loan is calculated with the following formula:
PMT = P × r × (1 + r)n / ((1 + r)n − 1)
- PMT — periodic payment amount
- P — principal (loan amount)
- r — effective interest rate per payment period
- n — total number of payments
The effective periodic rate r depends on both the compounding frequency (how often interest is compounded per year) and the payment frequency (how often you make payments). For standard monthly compounding and monthly payments, r = annual rate / 12. When these frequencies differ, the formula adjusts accordingly:
r = (1 + annual_rate / m)m/k − 1
where m is the number of compoundings per year and k is the number of payments per year. For continuous compounding, r = eannual_rate/k − 1.
Compounding & Payment Frequencies
This calculator supports a wide range of compounding and payment frequencies to match real-world loan agreements:
- Compounding: Annual, Semi-Annual, Quarterly, Monthly, Bi-Weekly, Weekly, Daily, Continuous
- Payments: Annual, Semi-Annual, Quarterly, Monthly, Bi-Weekly, Weekly
Different combinations affect both the payment amount and the total interest paid over the life of the loan.
Extra Payments
Making an extra payment each period is one of the most effective ways to reduce total interest and shorten your loan term. When you specify an extra payment amount, our calculator simulates the accelerated payoff and shows you side-by-side results: payments saved and interest saved compared to the standard schedule.
American vs. Metric Number Format
The calculator lets you choose between two number display formats:
- American (US) format: uses a comma as the thousands separator and a period as the decimal separator — e.g., 1,234.56
- Metric (European) format: uses a period as the thousands separator and a comma as the decimal separator — e.g., 1.234,56
Currency Support
The calculator supports 20 world currencies. The US Dollar (USD) and Russian Ruble (RUB) are featured as primary currencies, along with EUR, GBP, JPY, CNY, CAD, AUD, CHF, INR, BRL, MXN, KRW, SGD, HKD, NOK, SEK, DKK, PLN, and CZK.
Disclaimer
This amortization calculator is provided for informational and educational purposes only. Results are mathematical approximations and may differ from actual loan terms due to rounding conventions, lender-specific policies, fees, and other factors. Always consult your lender or a qualified financial advisor before making financial decisions.