How to Read an Amortization Schedule
Why early payments are mostly interest, and what changes when you pay extra.
4 min read
Step by step
- Each row splits one payment into interest and principal.
- Interest for the month = current balance × monthly rate.
- Principal is whatever is left of the payment, and it reduces the balance.
- Extra payments go straight to principal, cutting both interest and term.
Key takeaway: Paying extra early saves the most interest.
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Monthly payment, total interest and a full amortization schedule.
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