Which of 9 Loan Calculation Options Will Save You the Most Interest?

Have you been looking `for an amortization schedule to handle a loan feature that other web calculators can't accommodate?

Or are you looking for an amortization calculator which is easy to use yet provides you with tons of details including the ability to set the original loan date followed independently by the payment start date?

Or are you looking for an amortization calculator that can create professionally printed schedules from any device?

If so, then this is the calculator for you. Scroll down the page, and below the calculator, you'll find all the options and features explained.

If, on the other hand, what you want is a quick schedule, then here is all you need to do...

- Leave all inputs and setting set to their defaults
- Enter the "Loan Amount"
- Enter expected "Number of Payments"
- Enter the "Annual Interest Rate"
- Set "Payment Amount" to "0" (the unknown)
- Click either "Calc" or "Print Preview" for your schedule

That's it! That's all you need to do to create a standard loan schedule.

But what if the terms of your loan do not conform to this calculator's default settings? Or what if you want to know what amortization method will save you the most in interest charges?

Then keep reading. All the options, as well as the **nine types of amortization schedules this calculator can create**, are explained below...»

- Calculate tax benefits
- Appreciated value
- User can set dates
- Extra payments

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*adjustable rate loan or mortgage (ARM)*? Need to enter *regular or irregular extra payments*? Need to *amortize a construction loan*? Then use this financial calculator. Users can enter multiple loan advances and adjust payment amounts and interest rates on any date.

According to Wikipedia "Amortization refers to the process of paying off a debt (often from a loan or mortgage) over time through regular payments. A portion of each payment is for interest while the remaining amount is applied towards the principal balance."

Further, "an amortization schedule is a table detailing each periodic payment on an amortizing loan (typically a mortgage), as generated by an amortization calculator."

(To be technical here, I take issue with the use of the word "regular" as used in the definition. I prefer "periodic" or "recurring" instead. Perhaps I should edit the entry?)

That's what amortization is, but the definition does not address, naturally, the different methods used for calculating an amortization schedule.

This calculator does!

It supports the following nine amortization types.

- Normal Amortization
- Rule-of-78s Payment Table
- Interest Only Payment Schedules
- No Interest Loan Schedules
- Fixed Principal Amortization
- Canadian Loan Schedule
- Amortization with Points & Annual Percentage Rate (APR)
- Loan Schedule with Final Balloon Payment
- Negative Amortization

You'll find each method discussed below.

But, before we discuss how to create the various loan tables, I need to point out some essential options impacting the initial period's interest calculations.

Important Note About Dates: This calculator supports variable length first periods. That is, the calculator calculates the exact amount of interest due even when the initial period is shorter or longer than the other scheduled periods. **Supporting odd length first periods results in more accurate calculations, but you'll see interest charges that do not match other calculators.** If you want to match other calculators, then set the "Loan Date" and "1st Payment Date" so that they equal one full period as selected in "Payment Frequency." Example: If the "Loan Date" is May 15th and the "Payment Frequency" is "Monthly," then the "1st Payment Date" should be set to June 15th, that is IF you want a conventional interest calculation.

Click on "Settings" for "Long / Short Period Options"

A long first period occurs when the period between the loan date and the first payment date is longer than the selected payment frequency. The calculator can calculate the interest due for these extra or odd days in one of four ways.

- None - free money! No interest calculated on the odd days
- With first - odd day interest paid with first payment due. Payment will be larger than the other periodic payments.
- With origination - odd day interest is due when the loan originates - commonly known as "prepaid interest"
- Amortized - a small amount of odd day interest is paid with each payment. The calculator increases all payments to be equal.

A short first period occurs when the period between the loan date and the first payment date is shorter than the selected payment frequency. The calculator can calculate the interest due for the short period in one of three ways.

- No payment reduction - the calculator calculates what is considered to be a "normal" normal payment amount and uses it for the first payment. The last loan payment is reduced to compensate for the short period
- Reduce first - the first payment is reduced to compensate for the short period
- Reduce all - all payments are reduced to compensate for the short period.

Here's a more formal definition of odd days interest from the Financial Dictionary.

One more comment about dates.

By default, the schedule's totals are calculated as of December 31.

But some taxpayers pay taxes based on a different year-end. This calculator supports annual and cumulative totals as of any month end.

Click the "Settings" button and select "Year End Month."

If in doubt, use this setting when amortizing a loan. In the US at least, nearly all loans use the "normal" method.

These are the characteristics of a normal loan or mortgage:

- They have "level payments" i.e., the scheduled periodic payment amount does not change. (With the possible allowance, as discussed above, for odd day interest.)
- The interest amount paid declines each period as the loan balance is being paid down.
- Thus, the principal amount paid each period increases to keep the payment amount level.
- There may be a slight adjustment ("rounding") of the final payment so that the loan is brought to a 0 balance.

The next method, consumers will want to avoid.

The Rule-of-78s method front loads the interest due. That is, the debtor pays more interest early in the payment schedule and less interest later when compared to a "normal" loan.

Both the periodic payment amount and the total loan interest due are the same for both the Rule-of-78s and the "normal" methods. The only difference is how the interest gets allocated each period.

The blog post here thoroughly explains the Rule-of-78s amortization and why, as a consumer, you may want to avoid such loans.

For the lowest periodic payment, get a loan using the next payback method. There's only one catch...

Some loans require the borrower to pay only the interest due each period. Such loans are known as "interest only loans"

These are the characteristics of an interest only loan or mortgage:

- The periodic payment amount generally does not change.
- The interest amount paid each period is the same because no principal is paid, the loan balance does not change.
- The entire principal balance plus the last period's interest is due with the last payment.

If you think that interest only loans are not very common, then think again.

Many bonds sold to investors are interest only loans. The bond's buyers are lending the issuer money. The bonds pay the buyer a periodic coupon payment which is the interest on the debt. And as reported by Zacks the size of the bond debt in the US at "the end of 2017 was more than $40.7 trillion"

That's a lot of debt financed with interest only payments!

If you represent a bond issuer, you can prepare a bond coupon payment schedule with this amortization calculator. The "loan date" is the bond's issuance date and the "first payment date" is the date of the first coupon payment. Make sure to select the "Interest Only" amortization method.

Yes, it happens! I added this amortization method to the Windows version of this calculator 20 or more years ago. Someone called me (remember phone calls?) and said he and his wife were lending money to their son and they wanted to create a payment schedule that they could agree to, the catch was, there would be no interest charged.

This amortization schedule continues to support an interest-free loan.

You may ask, "Why not just enter a "0" interest rate?"

The answer is simple. If a user enters a "0" for any input, then the calculator interprets that as the unknown value. So if a user enters a "0" for the interest rate, the calculator will attempt to calculate the rate.

To get around this, select the "No Interest" option for an amortization method.

The following amortization method will save you interest charges if you can afford it.

Before computers and calculators, that is, before it was easy to calculate a level payment amount, lenders frequently had lenders payoff loans using the fixed principal amortization method.

Why?

Determining the payment amount requires only simple arithmetic. To calculate the payment due, first, divide the principal loan amount by the number of payments in the term and then add the periodic interest.

These are the characteristics of a fixed principal loan or mortgage:

- Payment amount start higher than a "normal" loan.
- The loans feature a declining payment amount. As the borrower pays down the principal balance, the interest due each period is reduced and therefore the payment decreases over time.
- The principal amount paid each period is fixed. The principal paid on a $1,200 loan with a term of one year will always be $100.
**The borrower pays less total interest**- There may be a slight adjustment ("rounding") of the final payment so that the loan is brought to a 0 balance.

The Canadian amortization method is the same as the "normal amortization method" except for one detail. When the user selects the Canadian method, the calculator automatically sets the payment frequency to monthly and the compounding frequency to semiannual.

A conventional loan typically uses the same frequency for both payments and compounding.

The Canadian method, because it uses less frequent interest compounding, results in a slightly lower scheduled payment amount because the interest due is somewhat less each period when compared to the interest charges owed under monthly compounding.

For more details, here's a A Guide to Mortgage Interest Calculations in Canada.

Occasionally, there are times when the terms of a loan call for a payment to be calculated on a 30-year payback but the loan will come due after five years of payments (for example).

Because the payment calculation uses a 30-year term, the balance of the loan will still be substantial relative to the starting balance when the term is up in five years, and the balance is due.

Creating an amortization schedule showing the balloon payment amount is simple with this calculator.

- First...
- Enter the loan amount
- Enter the interest rate
- Enter the number of payments which will be used to calculate the periodic payment due - in this case 30-years or 360 monthly payments.
- Enter "0" for the payment amount and click on "Calc"

- Then....
- Change the number of payments to the actual term of the loan - per this example that's 5 years or 60 payments
- Click on "Print Preview" to see your amortization schedule with a balloon payment.

balloon payment calculator. It creates a schedule too.

Need to calculate a regular periodic payment amount that results in a specific final balloon payment? Then see this site'sSome loans require the borrower to pay an upfront charge called "points."

Why would a borrower be willing to pay an extra charge?

When the borrower pays points, the lender reduces the interest rate. Points are in essence prepaid interest (and the IRS treats them that way). One point is one percent of the loan amount. Thus, one point on a $300,000 is equal to $3,000.

The user has two choices for how to create an amortization schedule with points. Click on "Settings" and select "Points, Charges & APR Options."

If "Include dollar value of points in interest charges" is checked then the calculator calculates the dollar cost of the points, and the payment schedule shows them paid at the loan origination. The calculator also adds the cost of points to the total interest charges.

If the user didn't check this option, then the dollar value gets reported in the header only, and the amount does not get added to the total interest.

See Moving.com "What Are Mortgage Loan Points?" for more details.

Points impact the loan's annual percentage rate. If you want to check the APR (and if you are the borrower, you should), you can include a Truth-in-Lending Act compliant calculation in the schedule's footer. Just check the option "Include Regulation "Z" APR Disclosure calculation at the end of the schedule?". For an accurate APR, don't forget to include any fees in "Other charges & fees (for APR calculation)?" input.

APR Calculator and Disclosure Statement. This calculator calculates APR and creates a printable disclosure statement.

If you have any questions about APR calculations and what fees to include or exclude, see this site'sUsers frequently tell me they use this calculator to "check their lender's payment amount."

That's fine, of course. But all borrowers should also understand, there is no such thing as a "correct payment amount." The only payment amount of concern is the amount agreed to between the lender and borrower. All things being equal if the lender says the payment is $315 a month and the borrower expects it to be $311 a month, it doesn't matter - as long as they both agree on the initial period's calculated interest amount. If the parties agree on the interest calculation, then paying a slightly higher amount will pay the loan off marginally faster or result in a smaller final payment, and the total collected as interest will be slightly less.

So what does this have to do with negative amortization?

Simple, if the lender and borrower agree on an amount that is not large enough to pay the interest due it results in negative amortization.

This amortization calculator gives the user the ability to set any payment amount. Rather than enter a "0" for the payment, enter the agreed upon payment amount.

When the payment amount is less than the periodic interest due, the loan balance will increase each period because the interest not covered by the payment must get added to the balance.

There is nothing wrong with a negatively amortizing loan per say. However, the borrower will have to be prepared to pay a single, large payment at the end of the term.

If you are the borrower, be sure to check the last payment row of the schedule for the final payment amount, which includes the accrued interest, to see if you can handle it.

Note the negative principal amounts in the below figure.

From time-to-time, I get requests from users for the ability to export an amortization schedule to Excel. This calculator won't do that. However, users can select the data and copy/paste to Excel.

You can copy/paste from either the main window or from the print preview window. If you copy from the main window, then formatting will remain intact. If you copy from the print preview window, then only the values will be copied. Depending on the browser you are using, you may have to use Excel's **Paste Special** feature and select "Text" for copy/paste to work.

If you want to copy from the main window, I think the easiest way to do that is to scroll to the end of the schedule and select the last row and then scroll upwards to select the entire table.

C-Value! for Windows program is even more flexible than this calculator and it will export directly to Excel.

MyIf you want to share this calculator's schedule with someone or save it in a digital format for later reference, you can print the results to a PDF file.

If you are using Google's Chrome browser, printing to PDF is a standard feature. Click on Chrome's menu (the 3 verticle dots) and select "Print..." Click on the "Change..." button and select "Save as PDF."

If you are not using a browser that supports printing to a PDF, no problem. You can install a PDF print driver. It pretty easy to do this. And there are many free ones from which to pick. In the past, I used PrimoPDF.

By the way, one advantage of installing a PDF print driver, even if you use Chrome, is you'll then be able to create PDF files from any application you use, not just your browser.

**Make sure, when saving to PDF that you use the "Print" button on the "Print Preview..." window.**

C-Value! for Windows program is what you need. It is even more flexible than this calculator, and you can save your work to a file for later recall.

Do you want to be able to save your inputs to a file so you can later edit them or reprint the schedule? Then theActually, there's not a lot to say about printing...

Users should know that printing is expected to work from any device. It's pretty cool to print a well-formatted schedule from a smartphone that is connected wirelessly to a modern printer. (I've personally tested this using an iPhone 5 and iPhone X printing to an HP LaserJet Pro 400.)

Make sure you are printing from the "Print Preview..." window where there are two print buttons available.

If you have any problems, please let me know what browser and version you are using. I can test various browsers, but unfortunately, I can't check too many printers (unless you are prepared to donate one to the cause!).

**free online loan payoff calculator**. For a step-by-step example see the payoff calculation tutorial.

Or what would you lke to know?

While this page covers a lot of material on amortization schedules, it can't cover everything.

Let me know in the comments below what I missed. Or feel free to ask your questions and I'll answer them (to the best of my ability).

Naturally, you can also tell me what I got right. Tell me what feature is particularly useful to you that you did not find in other online calculators.

MS Excel® is a registered trademark of the Microsoft Corporation.

Every loan has four primary attributes or variables. (1) The loan amount, (2) the number of payments, (3) the annual interest rate and (4) the payment amount.

Enter any 3 values and zero ('0') for the unknown value. Click the "Calc" button to solve for the unknown and create a schedule.

Note: you can enter a non-zero value for all 4 variables. In that case, your inputs will be used to create the amortization schedule.

The "Loan Date" is the date the monies are advanced. It is also called the "origination date".

The "First Payment Date" is the date the first payment is due. It may be the same date as the "Loan Date" but not usually. When they are the same, this is known as "Payment-in-Advance". Leases are typically paid-in advance.

"Payment Frequency" determines how often payments are due. Monthly is the most common in the USA.

"Compounding" impacts how interest is calculated. In most cases "Compounding" should equal the "Payment Frequency".

"Points" are charged on some loans by the lender. Points are expressed as a percentage of the loan amount. A 300,000.00 loan with 2 points results in an extra fee due the lender of 6,000.00. Points are common for mortgages in the US only. Normally, you will want to leave this input set to 0.0%.

To print any loan schedule, click on "Print Preview" and then "Print this schedule". "Print Preview" will also function as a "Calc" button.

- mortgage calculator — calculate future home value and compare to total mortgage cost
- loan calculator — supports extra payments and dates in a more mobile friendly design
- auto loan calculator — calculate total cost of ownership
- biweekly calculator — in one schedule, compare a biweekly loan to a normal loan
- financial calculator — create schedules with missed payments and changing rates

Hi Karl,

Question re loan amortizer online.

Entered loan as follows:

Principal: $200,000

Interest: 3% per annum

Payments: 60

Loan date: 10/2/2017

First payment date: 3/1/2018

Calculated payment: $3,593.74

This differs from what I calculated using LoanAmortizer Enterprise edition:

Principal: $200,000

Interest: 3% per annum

Payments: 60

Loan date: 10/2/2017

First payment date: 3/1/2018

Calculated payment: $3,629.45

note: 365 day year

I’m hopeful you could help explain the difference.

Thank you,

Jonathan

Hi Jonathan, first, thank you for posting the question here. Secondly, I’m a bit rushed right now, so if this answer doesn’t cover enough detail, perhaps we can take up remaining questions tomorrow?

To answer your question, the difference has to do with the dates, based on and assuming regular monthly payments, your example has a very long initial first period (longer than the monthly frequency selected). The question is, what to do with the additional interest?

Notice, this calculator has a lower payment, but the additional interest from what is commonly called the "odd days" is paid at the loan origination. My guess is, the other calculator is not showing the odd day interest paid up front but is adding it to all payments.

Neither method is wrong and both payment amounts can be considered correct.

In fact, if you look at this site’s just updated loan calculator there are some interest options and when the options are set to amortize the odd days interest, the payment amount will exactly match the other calculator.

Hope this helps.

While I’m at it, this finance calculator will also give you options for how interest is handled of irregular initial periods as will the just updated mortgage calculator.

Karl – thank you so much. You are generous in wisdom!

I use your amortization schedule frequently and have found it so user friendly. I am very pleased I have come across your website. For some reason, recently when I input the rate of 3.625% (for normal amortization) and do the print preview to print the payment schedule, it changes the rate to 3.6249%. None of the other rates will do this. I was curious about this and would prefer it stay as 3.625% for the printed schedule. Can you take a peek at this?

Glad you have found it to be "friendly". Now all I have to do is make it accurate. 🙂

I can confirm that I see the same problem. I’ll take a look at where the rounding is going wrong (converting from the representation of a number with the ‘%’ tacked on to an actual number) and get a fix out. Unfortunately, this won’t happen over night however.

Ann, the problem with the interest rate display (3.625% showing as 3.6249%) is fixed. Thanks for telling me about it.

Great!! Thank you so much.

Hi Karl,

When I came across to your website I see that there is Amortization Method option ( Canadian, Normal …..) . I did not see it on other sites this option. Would you please tell me what the difference between Normal and Canadian method ? I see that I am getting different numbers for each of them. Also there is any way to export the schedule report into excel ?

Thank you,

Adi

Hi Adi. First about the Canadian option. For some loans, if not all loans, the Canadians regulate the compounding frequency. It must be semiannual or annual. When a user sets this calculator to "Canadian", it forces the payment frequency to monthly and compounding to annual. If you were to set the "Amortization Method" to "Normal" and payment to monthly and compounding to semiannual, you would get the same results as setting "Amortization Method" to "Canadian."

There is no way to directly export to Excel. There have been several requests to add this feature and earlier this month, I spent some time developing it. The issue I ran into was this, I could either get the calculator to do a very plain export so that numbers remained numbers and then they could be included in formulas within the spreadsheet, or I could get the calculator to export with nice formatting but the numbers were converted to text in the cells. Including them in formulas then would fail.

Facing this dilemma, I decided to hold off on adding this feature until I have a better understand as to what users expect.

Hi Karl

Why is the normal calculation based on a 360 day period in a year? This impacts my calculations as interest is charged daily but paid monthly.

Thanks

Hi Nicolette, I assume that you saw you can change the day per year option under "Settings?"

Also, it impacts the calculation only if there are initial odd days. Does this address your concern?

Thanks Karl. Yes I only saw it this morning however, but I appreciate the speedy response 🙂

Hey Karl, This looks great. I was wondering, Is there a way this can be broke down to a bimonthly schedule, but only making the payment as 100%. ex. Say loan due every month is $500.00 so every 15 days the payment is $250.00. I was wondering how much I would save paying my home loan this way.

Thanks for your time!

Mark

Hi Mark, Sure, I think I understand. There are two options:

I just noticed, you said every 15 days. Biweekly is every other week. Is that OK. For every 15 days, you would have to use this calculator and select twice monthly for the payment frequency.

How can I set this calculator to calculate on a 365 day basis rather than a 360 day basis?

Click on the "Settings" button and select "360 / 364 /365" to open the window to make the setting.

Note, this setting only impacts interest calculations when a user has selected "Daily" or "Exact / Simple" compounding OR there is an initial irregular length period.

Thank you!

Hello and thanks for this extremely useful calculator. I especially like that you can put in any number of payments and not be tied to “years” as many do. I wonder if there is a way to view the entire amortization schedule via scrolling rather than hitting page to page? That would make it very easy to ‘cut and paste’ into exel (for example) so that it would be possible to digitally keep in particular files for particular buildings.

Hi, you can get the behavior you want by clicking on the

print previewbutton. I use it personally instead of using the calc button. You can scroll through the entire schedule when the print preview window is open. Also, if you select the schedule there, you can copy and paste to Excel. If you use a non-Microsoft browser, you probably will need to do a paste special in Excel.Hello, first thank you for this tool! @nd, is there any way to down load the results in soft copy?

Thanks!

Eric

Hi,

You’re welcome.

There is not a download or save feature per se. However, what you can do, is use the print preview feature (I use it

instead ofthe Calc button) and select the entire schedule and then you can copy/paste to Word or Excel for example.The other alternative is, again from print preview, print to a PDF. Google Chrome will offer this feature built in. For other browsers, I can’t really say. You may have to download a free PDF print driver.

Let me know if you need additional details.

It won’t allow me to enter a first payment date. Every time I enter 12/01/17, it changes it to 11/01/17

What’s the "Loan Date" set to? Payment date must be on or after loan date.

No/Yr Date Payment Interest Principal Balance

Loan: 11/01/2017 0.00 0.00 0.00 70,075.00

1:1 11/01/2017 1,073.22 0.00 1,073.22 69,001.78

2:1 12/01/2017 1,073.22 188.95 884.27 68,117.51

2017 Totals: 12/31/2017 2,146.44 188.95 1,957.49

Running Totals: 12/31/2017 2,146.44 188.95 1,957.49

I entered the loan date as of 11/01/17 and try to enter first payment date at 12/01/17, but it keeps changing the first payment date to 11/01/17, of course with no interest on the first payment, all principal.

I did get it to work. Thanks, Don

Great, because my earlier reply was totally off base and must not have made any sense.

Were you able to understand why it didn’t work for you at first? If so, can you let me know?

I had used 11/01/17 for Loan date and 12/01/17 first first payment, but it kept change 12/01/17 to 11/01/07. I changed the loan date to 11/02/17 and it let me use 12/01/07 for first payment. You can see the data above i copied and pasted with those dates, but as you can see,it indicated a first payment on 11/01/17 all principal, no interest.

I don’t know why the discrepancy.

Thanks, Don

How does one calculate interest if compound is less frequent than payment frequency? I like to be a ‘know it all’ and I don’t know it lol. For example, an annual compound with a monthly payment frequency.

I never discuss equations. That’s my IP accumulated over 30 years.

Yours is the best calculator site ever!

Now, question:

If I have loan for $70,000 on 12/1/17, with 4% interest, payable in installments on 12/1 in 2018, 2019, 2020, and 2021.

Each annual payment is to be $17,500 on principal + the accrued interest (which of course varies each year).

How do I get it to calculate each year’s payment?

Thanks!

Thank you Jackie!

This is a "

Fixed Principal" and that option/setting is found under the "Amortization Method". Set that option and "0" for the payment amount. Loan date will Dec 1, 2017 and first payment will be Dec. 1, 2018 of course. Loan paid off in 4 payments.Let me know if you have any questions.

I need an amortization schedule for:

1st payment: March 15, 2015

Amount Financed: $6800.00

Interest Rate 7%

Monthly Payments: $100.00

Person could only pay $100 each month so I need to see how long the payments will be.

Former Bookkeeper did not print out a schedule so I am having to go back to first payment date.

It showed payments thru 12-01-18, then it shows something like a one time balloon payment after that.

I need it to show me monthly for however many months it takes.

Can you help me?

Gloria

I think so.

Assuming the payments were made regularly and/or you just want a very good approximation for when the loan will be paid off (but not the exact date), you can use this calculator. What you do is enter the values you indicated above and the dates, but enter 0 for the "Payments" and the calculator will calculate the term of the loan using the $100.00 payment amount.

If, on the other hand, you need to audit the loan and come up with an exact balance, let me know and we can walk through that as well.