What is an Amortization Table?
An amortization table is a detailed breakdown of each loan payment, showing month by month how much goes to principal, how much to interest, and the remaining balance.
French Amortization System
This calculator uses the French system (the most common in Latin America), where:
- The monthly payment is fixed throughout the loan
- Initially, most of the payment goes to interest
- Gradually, the proportion reverses and more goes to principal
M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments.
How to Read the Table
| Column | Meaning | |---|---| | Month | Payment number | | Payment | Fixed monthly amount | | Principal | Portion that reduces the debt | | Interest | Cost of borrowed money | | Balance | Remaining debt |
Tips to Pay Less
- Extra payments: Pay more when you can to reduce the principal
- Shorter term: Fewer months = less total interest
- Compare rates: Small rate differences have a big long-term impact
It's the process of gradually paying off a loan through periodic payments that include both principal and interest until the debt is fully repaid.
In French amortization, the payment is fixed. In German amortization, the principal portion is fixed and the payment decreases over time. French is more common in Latin America.
Yes, early payments reduce the outstanding principal, which reduces future interest charges. Check with your bank about any prepayment penalties.
Even a 1% difference in rate can mean thousands of dollars on a long-term loan. Always compare multiple options before deciding.
Yes, this calculator works for any fixed-payment loan type: mortgages, personal loans, auto loans, etc.