Principal vs Interest Calculator
Calculate how much of your loan payment goes toward principal vs interest. Understand amortization, interest savings, and loan payoff strategies.
Step 1: Loan Details
Understanding Principal & Interest
Principal is the amount you borrowed. Interest is the cost of borrowing. In early payments, most goes to interest. Over time, more goes to principal.
Step 2: Payment Details
Impact of Extra Payments
Even small extra payments can significantly reduce total interest paid and shorten your loan term. $100 extra monthly can save thousands in interest.
Principal vs Interest Results
Monthly Payment
Amortization Schedule (First 5 Years)
| Year | Principal Paid | Interest Paid | Remaining Balance | Cumulative Interest |
|---|
Payment Breakdown Analysis
Principal vs Interest Formula
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n – 1]
Where P = loan amount, r = monthly interest rate, n = number of payments. Each payment includes both principal (reduces balance) and interest (cost of borrowing).
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