Amortization Calculator*

A low monthly payment might look appealing—but it doesn’t tell the full story of your loan. To understand the full cost of the loan, you need to see how your payments are applied over time.

An amortization calculator breaks down each payment into principal and interest, helping you track your loan balance and plan ahead. It’s especially useful for fully amortizing fixed-rate loans, where payments stay the same each month.

With the TransUnion^® amortization calculator, you can also explore how making extra payments toward the principal may reduce your total interest paid and shorten your loan term altogether. Plus, you can generate a detailed amortization schedule outlining each payment breakdown between principal and interest. This helps you plan your money and make smart choices about your loan and overall finances.

Note: This tool doesn’t account for adjustable-rate loans or added costs like property taxes and insurance. The calculator is a great tool, but it is just that – a tool. To get the most accurate picture of your loan, it’s best to talk to your lender or a financial expert.

What is amortization?

Before we get into how to use the calculator and some of its benefits, let’s explore what is amortization.

It is the process of paying off a loan through regular payments, scheduled payments over a set period of time. Each payment you make goes toward two things:

• Principal – the original amount you borrowed
• Interest – the cost your lender charges for the loan

For loans with a fixed interest rate, your monthly payment stays the same throughout the life of the loan. The loan term (e.g. 5, 20, or 30 years) determines how long it takes to fully repay what you owe.

In the early stages of repayment, a larger portion of your monthly payment goes toward interest. Over time, as your loan balance decreases, less interest accrues. That means more of each payment goes toward reducing the principal. This shift happens gradually and is laid out in an amortization schedule.

What is an amortization schedule?

An amortization schedule, which you can view on this calculator, is a table that details each periodic payment made toward a loan over its term. It breaks down how each payment is allocated between interest and principal repayment—it’s like a game plan for how you pay off the loan.

Key components of an amortization schedule

Amortization schedules typically consist of:

1. Payment number: Each row represents one payment. These are listed in chronological order, helping you track the sequence and timing throughout the loan term.
2. Payment date: This indicates the specific due date for future payments, which can help with planning and ensuring you don’t miss one.
3. Beginning balance: The outstanding loan balance at the start of each period. It decreases with each payment as the loan is gradually paid down.
4. Scheduled payment: This is the total amount due for each payment period. It remains constant for fixed-rate loans and includes both principal and interest payments.
5. Interest payment: The portion of each payment allocated to cover interest accrued. Your interest rate is determined by your credit score and history. If you notice inaccuracies in your report, visit the credit dispute support center to address them.
6. Principal payment: This portion of each payment that goes toward the principal balance. This amount increases gradually as the amount of interest decreases.
7. Ending balance: The ending balance reflects your total still owed after each payment is made each month.
8. Cumulative interest: This number represents the amount of all interest payments made from the beginning of the loan up to the current payment period.

Amortization schedule example

Let’s look at how a loan with a beginning loan balance of $100,000 with a fixed interest rate of 7% for 5 years (60 monthly payments) gets paid down. The monthly payment is $1,980.12.

Below is a snapshot of the first 4 payments to help illustrate how amortization works.

What to notice:

• Monthly payments stay the same: Each payment is $1,980.12
• Interest vs. principal: Each payment is divided between principal and interest.
• Principal reduction: With each payment, the remaining balance gets smaller.
• Monthly interest paid declines: The interest portion As the principal shrinks, the interest portion of each payment also drops.
• Cumulative interest adds up: Even with fixed payments, the total interest paid can really add up—some people may be surprised at the total.

Let’s use this example:

You bought a house for $700,000 and decided to make a 20% down payment of $140,000. The principal loan amount is $560,000.

You take out a 30-year mortgage loan with a fixed annual interest rate of 9%.

What’s your monthly payment?

Variables:

P = $560,000
r = 9% yearly rate. Divide by 12 to get the monthly rate. 9.0% / 12 = 0.7500% or .00750
n = 30 years. Multiply by 12 to get the # of monthly payments = 30*12 = 360

Now, let's plug these values into the equation:

M = 560,000 x [0.00750*(1+0.00750)^360] / [(1+0.00750)^360-1)
M= $4,506

How to use our amortization calculator

Understanding how to use an amortization calculator can help you manage your loan effectively and plan your finances.

Steps to calculate your payment

Here’s how to get your monthly payment estimate with the calculator at the top of the page:

1. Loan Amount: This is the full amount you’re wanting from the lender aka “the principal” of your loan. For example, if you are looking to take out a loan for $50,000, enter “50000” in the loan amount field.
2. Loan term: This is the length of the loan. You can designate the duration in months or years. For example, if you plan to repay the loan over four 4 years, enter "4" and select “years” or input “48” and select “months”.
3. Interest rate: Input the annual interest rate for your loan as a percentage. For example, if the lender is going to charge you 7.5%, then enter “7.5” in the field.
4. Loan start date: Click the calendar icon to input the month and year when the loan begins.
5. Calculate: After you’ve entered in your data, then hit the calculate button.

The amortization calculator will then provide you with a detailed breakdown of your payments, showing how much goes toward the principal and how much covers the interest.

Advanced options

If you want to fine-tune the loan estimate, then open the “Advanced Info” drop down located just below the “Calculate” button to unlock more customization options.

This amortization calculator lets you add extra payments to see how they can reduce your total interest and shorten your loan term.

How to Enter Extra Payments

You can add:

• Additional recurring monthly payments
• Additional yearly payments
• Additional one-time payments
• Or combine any of the above to see how it changes your loan

Simply enter the extra amount you wish to pay and the start date for these additional payments.

As you input these values above, the calculator shows you how making extra contributions toward your loan may reduce total interest costs and change the projected payoff date. It also updates the amortization schedule automatically.

Calculator output

The calculator includes 2 tabs that will display both your estimated monthly payment, total interest amount, and other information.

• Balance Over Time – A time-series graph showing how your loan balance, interest paid, and principal paid change over time.
• Amortization Breakdown – A detailed table showing how each monthly payment is split between principal and interest.

Making adjustments

You’re able to change any of these inputs on the fly to see how they impact your estimated monthly payments and total loan costs. This makes it easy to compare different loan scenarios, like choosing between a shorter or longer term, and see how each option affects your monthly payment and total cost.

Effects of making extra payments

Some loans can last a long, long time. It’s not uncommon that, by the end of the loan term, the amount of interest paid exceeds the amount you borrowed.

While it feels comfortable knowing you can always pay the same monthly payment when paying down an amortized loan, using an amortization calculator with extra payment options can show you how much faster you might be able to pay off your loan—and hopefully help you save some money along the way.

How Extra Payments Can Help You

Use the TransUnion amortization calculator to test different extra payment options—monthly, yearly, or one-time—and see how much you could save.

Considerations Before Making Extra Payments

Before throwing extra cash at your loan, check for prepayment penalties—some lenders charge fees for paying off debt early. Also, make sure you’re not shortchanging other financial goals, like building an emergency fund. When in doubt, calculate amortization and consider other penalties and costs to make sure extra payments work in your favor.

Benefits of using an amortization calculator

Loans can often cost you more than you might think. Interest adds up fast. That’s why an amortization calculator can help you make better decisions when it comes to borrowing money.

• Break down your payments: Track how much of each payment goes toward principal and how much goes toward interest at any point during the duration of the loan.

• Adjust inputs in real time: Instantly see how changes to your inputs affect your monthly payment, total interest, and payoff timeline.

• Understand total loan costs: See the total interest paid over the life of the loan. Now you can judge if the terms are favorable and fit within your long-term financial goals.

• Compare different loan scenarios: Test different loan terms, interest rates, and payment strategies to find what works best for you.

• Evaluate extra payments: Explore how additional payments toward your principal – monthly, yearly or one-time - can shorten your loan term and reduce the total interest paid.

• Enhance financial planning:Get a clear projection of your payments over time, helping you budget more effectively and understand your loan’s long-term impact.