When you take a loan, the bank gives you one number to remember: your monthly payment. Behind that number is a full table showing exactly how much of each payment goes to interest and how much reduces your debt. That table is the amortization schedule, and understanding it can save you a lot of money. Our free Loan Calculator creates one for any loan in seconds.
What the schedule shows
Each row in the schedule is one payment period and usually has these columns:
| Column | Meaning |
|---|---|
| Payment number | 1, 2, 3 and so on |
| Payment | The fixed instalment |
| Interest | Charged on the balance at the start of the month |
| Principal | Payment minus interest |
| Balance | What you still owe after the payment |
A short example
Loan: Rs 1,000,000 for 3 years at 14% a year. Monthly payment: about Rs 34,180.
| Month | Interest | Principal | Balance |
|---|---|---|---|
| 1 | Rs 11,667 | Rs 22,513 | Rs 977,487 |
| 2 | Rs 11,404 | Rs 22,776 | Rs 954,711 |
| 18 | about Rs 6,760 | about Rs 27,420 | about Rs 552,000 |
| 36 | about Rs 395 | about Rs 33,785 | Rs 0 |
Notice how interest falls every month while principal grows. The payment never changes, but what it pays for does.
The turning point
On most loans there is a month when the principal part becomes larger than the interest part. On long home loans this can take many years. Knowing where this point is helps you decide when prepaying makes the biggest difference: early in the loan, each extra rupee saves more interest. See loan prepayment for the details.
Why banks front-load interest
They do not. Interest is simply charged on the balance, and the balance is largest at the start. That is why early payments are interest-heavy. It is the natural result of a reducing-balance loan, explained in how EMI is calculated.
Using the schedule in real life
- Selling a car or house early: look up the balance at that month to know how much you must pay off.
- Tax and accounts: businesses record interest and principal separately.
- Refinancing: compare the remaining balance and interest with a new offer.
- Budgeting: see the date your loan ends and plan around it with the Days Until Calculator calculator.
Yearly vs monthly view
Our calculator shows a yearly summary for a quick overview and a monthly table for detail. The yearly view makes it easy to see how much interest you will pay each year of the loan, which is useful for planning bigger expenses.
How much will the whole loan cost?
The schedule shows interest month by month; adding it all up gives the total cost of borrowing. Our guide on calculating total interest on a loan shows how rate and tenure change that total. For a simple monthly instalment, the EMI Calculator gives the answer in one step.
Frequently asked questions
What is an amortization schedule?
A table that shows each loan payment split into interest and principal, and the balance left after each payment.
Why is most of my early payment interest?
Because interest is charged on the outstanding balance, which is highest at the start.
How can I find my loan balance after two years?
Look at payment 24 in the schedule; the balance column shows what you still owe.