Amortization Schedule

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

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...

Steps for a Quick Payment Schedule

1. Leave all inputs and setting set to their defaults
2. Enter the "Loan Amount"
3. Enter expected "Number of Payments"
4. Enter the "Annual Interest Rate"
5. Set "Payment Amount" to "0" (the unknown)
6. 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

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."

9 Types of Loan Amortization Schedules

Normal Loan Amortization

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.

Rule-of-78s Payment Schedule

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...

Interest Only Amortization

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.

No Interest Loan Amortization

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.

Fixed Principal Loan Table

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.

Canadian Amortization Schedule

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.

Amortization with a Balloon Payment

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...
  1. Enter the loan amount
  2. Enter the interest rate
  3. Enter the number of payments which will be used to calculate the periodic payment due - in this case 30-years or 360 monthly payments.
  4. Enter "0" for the payment amount and click on "Calc"
• Then....
  1. Change the number of payments to the actual term of the loan - per this example that's 5 years or 60 payments
  2. Click on "Print Preview" to see your amortization schedule with a balloon payment.

Loan Schedule with Points, Fees and APR Support

Some 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.

Negative Amortization Calculation

Users 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.

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.

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.

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 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.

Printing the Payment Schedule

Actually, 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!).

What Do You Think?

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.

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