How the calculation works
Find the balance without rebuilding the whole loan by hand
An amortizing loan balance falls because each payment is divided between interest and principal. Early in a long-term loan, a larger share of each payment usually goes to interest; later, more of the payment goes to principal.
This calculator can use the payment implied by the original loan terms or an actual regular payment you enter. You can also include a recurring extra-principal amount to model a faster balance reduction.
For a standard level-payment loan, Bk is the balance after k payments, P is original principal, r is the periodic rate, and PMT is the periodic payment. The calculator simulates payments when extra principal is included.
Outstanding principal versus payoff amount
The outstanding principal is the unpaid loan principal after credited payments. A payoff amount can be higher because it may include interest accrued since the last payment, per-diem interest through a good-through date, fees, or other contract adjustments. Use the Payoff Per Diem Calculator when you need to extend a balance through a specific date.
Using an actual payment
If the payment on a statement differs from the mathematically calculated payment, enter the regular principal-and-interest amount shown in the loan records. Do not include escrow for taxes and insurance unless the contract treats those amounts as part of the interest-bearing loan payment.
Extra principal changes the balance path
Recurring extra principal reduces the balance faster and generally reduces future interest. For a detailed comparison of payoff time and interest savings, use the Extra Payment Calculator or build a complete schedule in Amortization Pro.
Need a complete loan schedule?
For detailed loan work, Amortization Pro creates full payment-by-payment schedules, supports extra principal and changing rates, saves loan files, exports CSV data, and prints reports. The Windows software is a $25 one-time purchase.