Amortization Schedule Generator Calculator
Frequently Asked Questions
What is an amortization schedule?
An amortization schedule is a table showing how each loan payment is split between principal (the loan amount) and interest (the cost of borrowing). Early payments are mostly interest, while later payments apply more to principal. This helps you see the true cost of the loan.
Why do early payments go mostly to interest?
Loan calculations use a declining balance method. Since your principal balance is highest early in the loan, the interest portion (calculated as balance × rate) is largest. As you pay down principal, the interest portion decreases, so more payment goes to principal.
How can I reduce the total interest I pay?
To reduce total interest: make extra principal payments (especially early in the loan), choose shorter loan terms, get a lower interest rate, or make bi-weekly payments instead of monthly. Extra payments applied directly to principal can save hundreds or thousands in interest.
Can I make extra payments to pay off my loan early?
Yes, most auto loans allow extra payments. However, verify with your lender that extra payments apply to principal, not just future payments. Some loans have prepayment penalties, but most auto loans do not. Extra payments can save significant interest and pay off the loan early.
