Piraya Tools
Loan Calculator
Calculate monthly payments, total interest, and view amortization schedules.
Balance Over Time
Amortization Schedule
| Year | Principal Paid | Interest Paid | Remaining Balance |
|---|
Understanding Loan Amortization
A fixed-rate amortizing loan spreads repayment over equal monthly installments. Each payment covers both interest on the remaining balance and a portion of the principal. Early payments are mostly interest; as the balance decreases, a larger share goes toward principal. The monthly payment is calculated using M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly rate, and n is the total number of payments.
Making extra monthly payments reduces the principal faster, which in turn reduces the total interest paid and can shorten the loan term significantly. Even a modest additional payment each month can save thousands in interest over the life of a mortgage or car loan. Use the amortization schedule below to see the year-by-year impact.