Amortisation schedule with extra payments

An amortisation schedule shows what the payment hides: in the early years you mostly pay interest and the balance falls very slowly. That is what makes overpaying early so rewarding.

Enter the loan and, if you like, an extra monthly payment or a one-off lump sum. You will see the schedule payment by payment, how much interest you save, how many payments you cut and, in a chart, how the balance falls with and without the extra payments. Everything runs in your browser.

Each month the interest is calculated on the outstanding balance. The difference between what you pay and that interest is what you actually repay, and it is subtracted from the balance. As the balance falls, each payment carries less interest and repays more principal.

An extra payment goes entirely to reducing the principal. With the balance lower sooner, the interest of every later month is smaller and the loan is paid off earlier than planned. The calculator keeps the payment and shortens the term, which is the option that saves the most interest.

Why it is almost all interest at the start

Each month’s interest is calculated on the outstanding balance, which at the start is the whole loan. The payment is constant, so when interest is high, little is left to repay principal. Over the years the balance falls, interest shrinks and the amortising part grows.

Extra payments: how much they save

Every pound you repay early avoids the interest it would have generated over the rest of the loan. So:

• Repaying **early** saves far more than doing it at the end.
• A big **one-off** payment and a small **monthly** one can save about the same; what counts is how much principal you remove and when.
• The higher the interest rate, the bigger the saving.

Shorten the term or lower the payment

When you overpay, most lenders let you choose between keeping the payment and shortening the term, or keeping the term and lowering the payment. This calculator keeps the payment and shortens the term, which saves the most interest. Lowering the payment gives more breathing room month to month but saves less.

Common mistakes

• Forgetting the early-repayment charge in the contract.
• Overpaying with money you need as an emergency cushion.
• Comparing the interest saved without considering what you would earn by investing that money.
• Thinking a constant payment means constant interest.

Limits of this calculator

• It assumes a constant-payment loan at a fixed rate; it does not model variable rates or payment holidays.
• It does not include any early-repayment charge your lender may apply.
• The first 24 payments are shown, then yearly checkpoints, to keep the table readable.
• An extra payment always goes to principal and keeps the payment; it does not compute the option of lowering the payment.

Notice

This is an estimate. Check the official schedule in your contract and the early-repayment terms with your lender.