## How to Use the Amortization Schedule

##### Amortization Schedule

- Create printable amortization schedules with due dates
- Calculate loan payment amount or other unknowns
- Supports 9 types of amortization.
- User can set loan date and first payment due date independently.

- Leave all inputs and setting set to their defaults, and:
- Enter the "Loan Amount."
- Enter the expected "Number of Payments."
- Enter the anticipated "Annual Interest Rate."
- Set the dates (optional)

- 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 loan payment schedule quickly.

But what if the terms of your loan do not conform to this calculator's default settings?

#### Info...

**File save and open are new beta test features.**If you happen to get a different calculated result, do not assume that this calculator is making an error. Most likely, the problem is with the new file load feature. Please check that all settings got loaded as expected.

### Always enter (and reenter) a 0 for the unknown value.

Note - You __must__ enter a zero if you want a value calculated.

Why?

Because we want this calculator to be able to create a payment schedule using the loan terms **you** need. The payment amount can be whatever you want it to be. A payment is "correct" as long as both the lender and debtor agree on the amount! (If the calculator always recalculated the last unknown, then this feature would not be possible.)

TIP - Use an amortization schedule to confirm the periodic interest charges. Interest amounts are the calculations that borrowers should be validating.

### Four values you will always need to set:

Cheat Sheet | ||
---|---|---|

Years | Biweekly | Monthly |

4 | 104 | 48 |

5 | 130 | 60 |

6 | 156 | 72 |

10 | 260 | 120 |

15 | 390 | 180 |

20 | 520 | 240 |

25 | 650 | 300 |

30 | 780 | 360 |

- the amount borrowed. The*Loan Amount**principal*amount. It does not include interest.- the length of the loan. The "Payment Frequency" setting also impacts the loan's term. For a term of fifteen years, if the payment frequency is biweekly, you need to enter 390 for the number of payments. (390 biweekly payments = 15 years)*Number of Payments (term)*- the nominal interest rate. This the quoted interest rate for the loan.*Annual Interest Rate*- the amount that is due on each payment due date. For "normal amortization", this includes principal and interest.*Payment Amount*

**Set one of the above to 0 if unknown.**

*How do I calculate how much I can borrow?*- set the loan amount to zero
- enter the number of payments
- enter the annual interest rate, and
- enter the expected or desired payment
- click calculate

*How do I calculate how long it will take to pay off a loan?*- enter the loan amount
- set the number of payments to zero
- enter the annual interest rate, and
- enter the expected or desired payment
- click calculate

*What interest rate allows me to pay $500 a month?*- enter the loan amount
- enter the number of payments
- set the annual interest rate to zero, and
- enter $500 for the payment amount

### About Dates - they may be (or may not be) important (to you):

If you want an estimated schedule, you may skip over this section.

But, if you want an accurate, to the penny, amortization schedule, then you should spend a minute or two understanding these options.

*Loan Date*- the date the money is available. If the loan is for a vehicle or home, it is the loan's closing date.*First Payment Due*- for leases, it may be the same as the loan date. See "About the loan origination date (start date) and first payment date" above.

Important - __Selecting dates will result in interest charges as well as payment calculations that do not match other calculators.__

And that's the point!

However, if you want to match other calculators, then set the "Loan Date" and "First Payment Due" so that the time between them equals one full period as set by "Payment Frequency." Example: If April 10th is the "Loan Date" and the "Payment Frequency" is "Monthly," then set the "First Payment Due" to May 10th, that is __if__ you want an estimated interest calculation.

More details about the settings available for odd day and irregular period interest.

### Four loan options you most likely don't need to touch.

*Payment Frequency*- how often do you want to schedule payments? The calculator supports 11 options, including biweekly, monthly, and semiannual (useful for bond coupon interest schedules). The schedule calculates the payment dates from the first payment due date (not the loan date).*Compounding*- usually, the compounding frequency should be set to the same setting as the payment frequency. Doing so results in simple, periodic interest. Setting this option to "Exact/Simple" results in simple, exact day interest.*Points*- one point is one percent of the loan amount. Points are generally applicable to U.S. mortgages. More about loan schedules with points, fees and APR support.*Amortization Method*- leave this setting set to "normal" unless you have a specific reason for setting it otherwise. For a complete explanation of these options, see Nine Loan Amortization Methods.

### Seven loan options you may want to tweak.

*These options are available by clicking on "Settings."*

*360 / 364 / 365*- days-per-year option. This setting impacts interest calculations when you set compounding frequency to a day based frequency (daily, exact/simple or continuous)**or**when there are odd days caused by an initial irregular length period.*Long/Short Period Options*- settings for how interest is shown on the schedule when the initial payment period (the time between the loan date and first payment date) is longer or shorter than the selected payment frequency. Click for more details and examples.*Last Period Rounding Options*- due to payment and interest rounding each pay period (for example, payment or interest might calculate to 345.0457, but a schedule will round the value to 345.05), almost all loan schedules need a final rounding adjustment to bring the balance to "0". A footnote on the payment schedule informs you of the rounding amount.*Points, Charges & APR Options*- see loan schedules with points, fees and APR support.*Year-End Month*- this setting establishes after what month the calculator shows year-end and running totals. This option is to accommodate businesses with fiscal year ends that do not coincide with the calendar year-end.*Currency Symbol*- select a currency sign from over 90 countries. Includes local conventions for thousand separator.*Date Convention*- select from six date format conventions, including YYYY-MM-DD and DD.MM.YYYY

## Beyond Basic Amortization Schedules

### Amortization schedule with a final balloon payment

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

- 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." The result is the payment for a 30-year loan.

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

### A Negative Amortization Schedule

If a lender and borrower agree on a payment that's not large enough to pay the interest due, the result is negative amortization - negative because the loan balance keeps increasing even after the borrower makes a payment.

Since this amortization calculator gives the user the ability to enter any payment amount, it supports negative amortizing loans. All you have to do is enter the agreed-upon payment amount.

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

Note the negative principal amounts in the below figure.

## Printing the Payment Schedule

**Printing will work from any type of 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 plan to donate one to the cause!).

## Save Payment Schedule to PDF

If 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 three verticle dots) and select "Print..." Click on the "Change..." button and select "Save as PDF."

If you are not using a browser that supports PDF printing, that's not a problem. You can install a PDF print driver. It's 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.**

## Need an Amortization Schedule in MS Excel^{®}?

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.

## What Do You Think?

Or what would you like 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).

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