Amortized Loan Calculator

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What Is an Amortized Loan?

An amortized loan (also called amortizing loan) is a loan where periodic payments are made towards both the principal (amount borrowed) and the accrued interest. Car loans, home mortgages, and personal bank loans are all examples of amortized loans where equal payments are made every month.

How to Calculate an Amortized Loan Payment?

Here is the formula to compute the periodic repayment:

where A is the periodic payment amount, P is the principal (borrowed sum), R is the yearly interest rate, T is the loan term in years, and N is the number of payments made in a year (which is 12 for monthly payments).

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