Amortization schedule calculator

This free online loan amortization calculator will help you to find out your monthly interest payment and also determines out how much of your repayments will go towards the principal and how much will go towards interest.

How to calculate loan amortization payment:

Follow tips below to calculate loan amortization payment manually:

  1. Gather information you need to calculate the loan’s amortization:

    • principal;
    • interest rate;
    • loan term;
  2. Write down the formula: M = P * ( J / (1 - (1 + J)-N))

    M = payment amount

    P = principal, meaning the amount of money borrowed

    J = effective interest rate. Note that this is usually not the annual interest rate; see below for an explanation.

    N = total number of payments

  3. Note the total number of payments N: if your loan term is 5 years and you have to make monthly payment, your N = 5*12=60

  4. Calculate your effective interest:

    Firstly, calculate interest rate,as decimal = 5/100 to get 0.05

    Secondly find J = decimal interest rate / numbers of payment per year: e.g. 0.05/12 = 0.004167

  5. Calculate (1+J)-N: First add 1+J, then raise the answer to the power of «-N.»

    In our example, (1+J)-N = (1.004167)-60 = 0.7792

  6. Calculate J/(1-(your answer)): n a simple calculator, first calculate 1 - the number your calculated in the previous step. Next, calculate J divided by the result, using the effective interest rate you calculated above for "J."

    In our example, J/(1-(answer)) = 0.004167/(1-0.7792) = 0.01887

  7. Find your monthly payment: multiply your last result by the loan amount P

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Loan payment amortization schedule Excel:

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