Create a **detailed loan payment schedule** showing the monthly breakdown of principal and interest. See exactly how extra payments can save you thousands.
Enter your loan details to generate your **Amortization Schedule** and payment breakdown.
Amortization is the accounting process of spreading out a loan obligation over a series of fixed, equal payments. Unlike simple interest loans, an **amortization schedule** systematically determines how each payment is split between **principal reduction** and **interest payment**. Understanding this process is vital for any borrower, particularly for long-term debts like mortgages.
The formula used in this calculator guarantees that the loan balance reaches exactly zero by the last scheduled payment. The calculation uses compound interest principles, which is why early payments contribute heavily to interest: the interest is calculated on the remaining, higher loan principal. This calculator removes the complexity of manual calculations, providing you with a clear roadmap for your debt.
When you input an 'Extra Monthly Payment,' that amount goes 100% towards the loan's principal. This action immediately reduces your outstanding balance, which in turn reduces the amount of interest charged in all subsequent payments. Over a 30-year term, this compounding effect can lead to **tens of thousands of rupees in savings** and shorten your loan term by several years, making early repayment a powerful financial strategy.
The **amortization period** is the total length of time it will take to pay off the mortgage or loan in full, assuming you follow the original payment schedule. It is usually expressed in years (e.g., 15 years or 30 years). Our calculator shows the *actual* period, which may be shorter if you include extra payments.
Interest is always calculated on the **remaining principal balance**. Since each payment reduces the principal, the interest calculated in the subsequent month is based on a smaller figure. This causes the interest portion of your monthly payment to steadily decrease, while the principal portion steadily increases.
The **principal** is the actual amount of money you borrowed. **Interest** is the cost of borrowing that money, expressed as a percentage rate. Every loan payment is a combination of both.