Amortization Calculator

The amortization calculator is a tool that helps individuals understand how loans are paid back. The calculation provides information about monthly payment amounts, the number of payments required, and what portion goes to principal and interest.
Let's go over the basics of loans and that strange word 'amortization'.

What is a loan?

A loan is a sum of money that you borrow from a bank or other financial institution. You agree to pay back the loan plus interest over a period of time. But a loan is more than just a sum of money and a promise to pay it back.

A loan is your first home, your first car, a chance to start your own business, it's consumer debt or a chance to buy an appreciating asset now, it's something grown ups do and some tell you to avoid. It's everywhere in our society and we want to help you understand both the practical parts of loans and the psychological aspect of them.

How do loans work?

Loans are a way to get money now and pay for it later. The loan is a promise to pay back the money plus interest over a period of time.

What does amortization mean?

Amortization (pronounced ah-mor-tiz-ay-shun) is the process of paying off a loan over time. It stems from the verb 'amortize', which meansto pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund'.or to gradually reduce or write off the cost or value of (something, such as an asset).

So amortize or amortization basically means the plan or agreement for how you're going to gradually pay off a loan. Typically, you'll see it as an Amortization Schedule, Chart or Table.
Amortization schedule references the date or calendar schedule for how you're going to pay off the loan. While Amortization Table is just a format for how that data is displayed. Another amortization schedule display is a Chart which adds some benefit to seeing how the loan changes over time. We display the amortization "donut chart" schedule giving you a visual breakdown of where you're payment is going and buttons that allow you to skip to different portions of that schedule.