How it works
An amortization schedule maps out every payment on your loan from start to finish. You enter three pieces of information — the amount borrowed, the annual interest rate, and how many years you have to repay — and the calculator produces a detailed table. Each row shows one payment period (typically monthly), breaking down exactly how much of that payment covers interest and how much reduces what you actually owe.
Unlike calculators built only for mortgages, this tool handles any fixed-payment loan: a $20,000 personal loan, a vehicle purchase, equipment financing, or a small-business credit facility. The mechanics are identical regardless of the loan's purpose. You get back a full amortization schedule that lets you see the payment-by-payment journey from first installment to final payoff.
The formula
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Here, M is the fixed payment amount, P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). Once M is locked in, the schedule calculates interest for each period as the remaining balance × r, then subtracts that interest from the payment to find how much principal gets paid down.
Worked example
You borrow $20,000 to finance equipment for your business. Your lender offers 6.5% annual interest over 4 years. What does the full repayment schedule look like?
First, convert the annual rate to a monthly decimal:
Monthly rate: 6.5% ÷ 12 = 0.541667% = 0.00541667
Total payments: 4 years × 12 months = 48
Now apply the fixed-payment formula:
M = 20,000 × [0.00541667(1.00541667)^48] / [(1.00541667)^48 − 1]
M = 20,000 × 0.023118 ≈ $462.36 per month
Your monthly payment stays constant at $462.36. The schedule then unfolds:
Month 1:
Interest: $20,000 × 0.00541667 = $108.33
Principal: $462.36 − $108.33 = $354.03
Remaining balance: $20,000 − $354.03 = $19,645.97
Month 2:
Interest: $19,645.97 × 0.00541667 = $106.36
Principal: $462.36 − $106.36 = $355.99
Remaining balance: $19,645.97 − $355.99 = $19,289.98
Notice that principal increases slightly each month while interest shrinks — the balance is smaller, so the interest charge falls, and more of your fixed $462.36 goes toward principal. By month 48, the final payment clears the last few cents of debt.
Total cost over 4 years:
Total paid: $462.36 × 48 = $22,193.28
Total interest: $22,193.28 − $20,000 = $2,193.28
The full 48-row schedule shows every intermediate step, helping you forecast cash flow or decide whether a shorter (higher monthly payment) or longer (higher total interest) term makes sense for your situation.
Common mistakes
One frequent error: confusing the annual rate with the monthly rate. If your lender quotes 6.5% APR, divide by 12 before plugging into the formula — don't use 6.5 directly as the monthly rate or your payment will be wildly inflated.
Another pitfall is assuming the schedule accounts for late fees, prepayment penalties, or insurance products the lender might bundle in. This calculator shows the pure amortization under a fixed rate; your actual monthly obligation may be higher if your loan agreement includes those add-ons. Always cross-check the lender's disclosure document.
Finally, remember that this is an estimate, not professional financial advice. Interest calculations, term lengths, and fees vary by lender and loan type. Use this schedule to understand the mechanics and compare scenarios, but confirm the exact terms with your lender before signing.