An amortization schedule shows how a loan is paid off over time, breaking each payment into principal and interest. Understanding your amortization schedule can help you see how much interest you’ll pay and how extra payments affect your loan.
Each loan payment is split between interest and principal. Early in the loan, most of your payment goes toward interest. Over time, more of each payment goes toward reducing the loan balance.
Amortization explains why long-term loans can cost much more than the amount borrowed. Seeing the schedule helps borrowers understand the true cost of financing.
Making extra payments toward principal can significantly reduce total interest and shorten the loan term. Even small additional payments can have a big impact over time.
Use our mortgage calculator to see a full amortization schedule and understand how your payments break down over time.
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