Amortization calculator
A fast, accurate, and utility-focused tool for calculating loan repayments.
An amortization calculator is a financial instrument used to determine the EMI (Equated Monthly Installment) or periodic payment amount due on a loan (typically a mortgage) based on the amortization process. The calculator produces an amortization schedule, a table detailing each periodic payment on an amortizing loan.
Calculator
Amortization Schedule
The following table illustrates the breakdown of principal and interest for each month of the loan tenure.
| Month | Payment | Principal | Interest | Balance |
|---|
Understanding Amortization
In the context of a home loan or mortgage, amortization refers to the process of paying off a debt over time through regular payments. A portion of each payment is for interest (determined by the annual interest rate) while the remaining amount is applied towards the principal balance.
Key Mechanics
- Early Term: A larger percentage of the EMI (Equated Monthly Installment) goes towards interest.
- Late Term: As the principal balance decreases, the interest component decreases, and a larger portion of the payment goes towards principal reduction.