What an Amortization Schedule Tells You About Your Loan
Amortization is the process of paying off a loan through regular, equal payments over a fixed period. Each payment covers the interest due for that month, and whatever is left goes towards reducing the principal. An amortization schedule lists every one of those payments so you can see the loan shrink over time.
How to read the schedule
- Principal – the part of the payment that reduces what you owe.
- Interest – the lender's charge for that month, based on the balance at the start of the month.
- Total paid – principal plus interest; this stays the same every month.
- Balance – what you still owe after the payment.
Why early payments are mostly interest
In the first months the balance is at its highest, so the interest portion is large and only a small slice reduces principal. As the balance falls, interest falls with it and more of each payment goes to principal. That's why the "Half the loan repaid by" figure is usually well past the halfway point of the term: you pay off the second half of the principal much faster than the first.
Practical uses of an amortization table
- Planning prepayments – see how much interest is still ahead and when an extra payment would help most.
- Selling or refinancing – know the outstanding balance at any future date.
- Tax and accounting – find the total interest paid in a particular year.
- Comparing offers – check how two rates or terms change the interest year by year.
Use the Monthly and Yearly buttons above the table to switch views, and the download button to open the schedule in Excel or Google Sheets.
A note on accuracy
This schedule assumes a fixed rate, payments on time, and interest calculated monthly on the reducing balance. Lenders may round each payment or use daily interest, so their figures can differ slightly from these.