Banking and Loans

How to Read a Loan Amortisation Schedule

Learn how each loan payment splits into interest and principal, why early payments are mostly interest, and how to read the balance, with a worked example.

Published by: Arunangshu Das

Founder of TCI

Published:: Nov 14, 2026
Updated:: Nov 14, 2026
Reviewed:: Nov 14, 2026

Editorial dates are calendar dates in India Standard Time.

Keywords

loan amortisation calculator
amortization schedule calculator
loan repayment schedule
amortization table interest and principal

The same payment, a different split every month

A level-payment loan asks for the same amount every month, yet what that amount does changes with every payment. Early on most of it is interest; near the end almost all of it repays the loan. An amortisation schedule sets this out row by row. This guide builds one schedule, reads it across and down, and marks the two points borrowers ask about most.

Amortisation, schedule, interest part and principal part

Amortisation is the repayment of a loan by regular payments that each cover the interest for the period and repay part of the amount borrowed. An amortisation schedule lists every payment with its interest part, its principal part and the balance still owed after it. With a level payment the interest part falls and the principal part rises from one payment to the next, because interest is charged on a shrinking balance.

The spelling is amortisation in the United Kingdom, India and Australia and amortization in the United States and Canada. Indian lenders also call the table a repayment schedule, and the payment an EMI. The arithmetic is the same under each name.

See where each payment goes and what is still owed

Use the schedule to see how much of a year's payments was interest, what the balance will be after a given payment, and how slowly the balance falls at the start of a long loan. The chart draws the balance, the interest paid so far and the principal repaid so far from the same rows.

One month at a time

The monthly payment is the level payment of the Loan EMI model: the smallest payment in steps of 0.01 whose ledger clears the loan within the term. Each month, interest = balance × annual rate ÷ 12, rounded to 0.01; principal = payment − interest; new balance = balance − principal. The last payment is the remaining balance plus its interest. Loan years group the payments in twelves from the first payment, and each yearly total is the sum of its rows. Two points are read from the rows: the first payment whose principal part is larger than its interest part, and the first payment after which half or less of the loan is still owed.

Formula

Interest = balance × r, with r = annual rate ÷ 12 ÷ 100; principal = payment − interest; new balance = balance − principal

Payment = P × r ÷ (1 − (1 + r)^−n), rounded up to the smallest 0.01 step that clears the loan within n payments.
The last payment = remaining balance + its interest.
Sum of the principal parts = amount borrowed. Sum of the interest parts = total interest.
At a zero rate every payment is principal.

Reconcile 300,000 at 6% over 360 months

Borrow 300,000 at 6% a year over 360 months. The payment is 1,798.66. The first payment holds 1,500.00 of interest and 298.66 of principal, leaving 299,701.34. In loan year 1 the payments total 21,583.92, of which 17,899.80 is interest and 3,684.12 is principal, leaving 296,315.88. Payment 222 still holds 899.42 of interest and 899.24 of principal; payment 223 is the first with more principal, 903.74 against 894.92. More than half of the loan is owed until payment 252, after which 149,811.62 remains. The final payment is 1,790.23. Total interest is 347,509.17 and all payments total 647,509.17.

After 60 payments 279,162.50 is still owed: the first five years pay 87,082.10 of interest and repay 20,837.50. After 180 payments, half the term, 213,144.12 is still owed and 236,902.92 of interest has been paid. In the last loan year the payments total 21,575.49, of which only 684.92 is interest.

Enter a loan amount of 300000, an annual rate of 6 and a term of 360 months.
Read the payment of 1,798.66 and total interest of 347,509.17.
In the yearly table, read 17,899.80 of interest in loan year 1 and 684.92 in loan year 30.
List loan year 19 and find payment 223, the first with more principal than interest.

Enter amount, rate and term

Enter the amount borrowed, the annual rate and the term in complete months, then build the schedule. Totals are listed for every loan year. Choose a loan year to list its payments, or choose all payments for the full schedule. Choose a market for number formatting only.

Read across for the split, down for the balance

Read across a row to see where one payment goes, and down the balance column to see what you would still owe at any point. The early rows are mostly interest, so the balance falls slowly at first and quickly at the end. The payment at which principal overtakes interest and the payment at which half the loan is repaid are usually well past the middle of a long loan at a high rate, and near the start of a short one. The yearly totals show how much of a year's payments was interest.

A shorter term changes the picture sharply. The same 300,000 at 6% over 180 months costs 2,531.58 a month and 155,681.58 of interest, and principal exceeds interest from payment 43. A lower rate does the same more gently: at 4% over 360 months the payment is 1,432.25, total interest 215,607.20 and the turning payment is 153.

Fixed rate, level payments, no extras

One amount borrowed at the start, a fixed nominal annual rate charged at one twelfth each month on the balance still owed, equal model months, interest rounded half up to 0.01 each month, and level payments at the end of each month. Loan years count twelve payments from the first payment and are not calendar or tax years. There are no fees, taxes, insurance, extra payments, missed payments or rate changes.

What the schedule leaves out

Amounts above 0 up to 1 trillion with at most 2 decimal places; annual rates from 0% to 100%; terms from 1 to 600 whole months. The schedule does not model extra or missed payments, a rate that changes, interest-only or deferred periods, a balloon, payments other than monthly, daily interest between actual dates, or a lender's own rounding. It does not show negative amortisation, because the payment always covers the month's interest.

A real loan account charges interest between actual payment dates, so months of different lengths carry slightly different interest, and a first payment more or less than a month after the loan starts changes the first row.

Half the term is not half the loan

Do not expect half the loan to be repaid at half the term: in the example 213,144.12 of 300,000 is still owed after 180 of 360 payments. Do not read loan years as tax years when totalling interest for a return. Do not expect a lender's schedule to match to the cent; day counts and rounding differ. Do not treat the first payment with more principal than interest as a target; it only describes the schedule.

Schedules and disclosures by market

In the United States, the CFPB explains amortization as paying off a loan with regular payments so that the amount owed falls with each one, and describes negative amortization as the case where payments do not cover the interest. In India, the RBI's Key Facts Statement rules for retail loans set out the terms a lender must give a borrower; ask the lender for the loan's repayment schedule. In the United Kingdom, MoneyHelper offers a mortgage repayment calculator for repayment and interest-only mortgages. In Australia, Moneysmart explains personal loan costs and comparison rates. In Canada, fixed-rate mortgages are quoted with semi-annual compounding, so a monthly schedule needs the equivalent monthly rate; a business mathematics text from eCampusOntario works through amortization schedules. The calculator applies no country's rule; the market selector changes number formatting only.

Amortisation schedule compared with an EMI figure

The Loan EMI Calculator gives the payment and the totals for the same loan; this calculator lists every payment behind those totals, with yearly totals and the two turning points. Use the Home Loan Calculator when you start from a property price and a deposit, and the Personal Loan Calculator when an upfront fee is deducted from the money you receive.

Educational scope

Educational arithmetic for a fixed-rate loan repaid by level monthly payments. It is not a loan offer, a lender's repayment schedule, a statement for tax purposes or financial advice. A lender's own rounding, day count, fees, payment dates and conventions will differ; rely on the lender's documents.

Companion calculator

Put the method into practice.

Open Loan Amortisation Calculator

Frequently asked questions

Is half the loan repaid at half the term?

No, unless the rate is zero. For 300,000 at 6% over 360 months, 213,144.12 is still owed after payment 180. Half or less is owed only after payment 252, in loan year 21.

How does a shorter term change the schedule?

The payment rises and far less interest is charged. Over 180 months instead of 360, the example's payment is 2,531.58 instead of 1,798.66, total interest is 155,681.58 instead of 347,509.17, and principal exceeds interest from payment 43 instead of payment 223.

How does the interest rate change the schedule?

A higher rate puts more interest in every early payment and moves both points later. For 300,000 over 360 months, principal first exceeds interest at payment 153 at 4%, payment 223 at 6% and payment 242 at 7%.

Can I use the yearly totals for a tax return?

Not directly. Loan years here count twelve payments from the first payment, which rarely matches a tax year, and a lender's interest certificate is the document to rely on. Add the rows for the payments that fall in your tax year for an estimate.

Does the schedule change if I pay extra?

Yes. An extra payment reduces the balance at once, so every later row holds less interest and the loan ends sooner or the payment falls. This schedule assumes no extra payments.

What is negative amortisation?

A loan whose payment is smaller than the interest charged, so the unpaid interest is added and the balance grows. The CFPB describes it for some loan types. It cannot occur in this schedule, where the level payment always covers the month's interest.

Sources and review

Sources reviewed Nov 14, 2026. Consult current local rules before relying on time-sensitive information.