Calculate loan payments with detailed amortization schedule and interactive charts.
The Amortization Calculator helps break down loan payments into interest and principal over time. While it can handle most amortization calculations, specialized calculators may be better suited for specific loan types.
Amortization has two primary meanings. The first refers to the gradual repayment of a loan through scheduled payments. The second is an accounting method used to spread the cost of long-term assets over time.
Amortization is commonly used in mortgages, auto loans, and personal loans. Each payment includes interest and principal. As the loan balance decreases, the interest portion becomes smaller.
This gradual shift can be clearly seen in an amortization schedule.
Credit cards are revolving debt and are not amortized. Other examples include interest-only loans and balloon loans.
An amortization schedule details each payment made over the life of a loan. It shows how much goes toward interest, principal, and the remaining loan balance after each payment.
Most schedules assume fixed interest rates and do not include extra payments or fees.
In accounting, amortization spreads the cost of long-term assets across their useful life. Tangible assets like equipment are typically depreciated, while intangible assets are amortized.
Under IRS Section 197, many acquired intangible assets can be amortized over time for tax purposes. Some self-created or indefinite-life assets may not qualify.
In the U.S., certain startup costs must be amortized once a business becomes active. These include consulting fees, market research, advertising, and employee training costs incurred before operations begin.
Because interest is calculated on the remaining principal balance.
Standard schedules do not, but extra payments can shorten the loan term.
No. Credit cards and balloon loans are common non-amortized examples.
No. It is also used in accounting to spread asset costs over time.
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