What is Loan Amortization?
Amortization is the process of spreading out a loan into a series of fixed payments over time. Even though your payment remains the same, the way that payment is applied changes every month.
Interest vs. Principal
In the early years of a mortgage or long-term loan, the majority of your monthly payment goes toward paying off the interest. As time passes, a larger portion of your payment goes toward reducing the principal balance.
Why Amortization Schedules Matter
An amortization schedule gives you a detailed look at every payment over the life of your loan. By reviewing your schedule, you can see exactly how much you can save in interest by making extra payments toward your principal.
Use our Amortization Calculator to generate a full schedule for your loan instantly.