Amortization Calculator
Amortization Calculator and Other Financial Tools
The Amortization Calculator is a versatile tool for most amortization calculations. However, if you need a more specialized calculator, this website offers several other options tailored to specific financial needs:
- Mortgage Calculator
- Auto Loan Calculator
- Investment Calculator
- Business Loan Calculator
- Personal Loan Calculator
- FHA Loan Calculator
- VA Mortgage Calculator
- Annuity Calculator
What is Amortization?
Amortization has two main definitions:
- The structured repayment of a loan over time.
- The allocation of an asset’s cost over its useful life in business accounting.
Paying Off a Loan Over Time
When you take out a mortgage, auto loan, or personal loan, your monthly payments cover both interest and principal. Interest is calculated on the remaining balance, so as the principal decreases, interest payments shrink over time. This process is best visualized in an amortization table.
Credit cards, however, are typically not amortized because they involve revolving debt with flexible repayment options. Similarly, loans like interest-only and balloon loans have different structures that don’t follow standard amortization schedules.
For credit card-related calculations, use our Credit Card Calculator or Credit Card Payoff Calculator to develop a repayment plan.
Amortization Schedules
An amortization schedule (or table) details every payment over a loan’s lifetime, breaking down interest and principal components. Each amortization calculation on this site includes:
- Annual & monthly amortization schedules
- Breakdown of principal vs. interest payments
- Remaining balance after each payment
Most amortization schedules assume fixed-rate loans and don’t account for extra payments or fees. They are not typically used for adjustable-rate mortgages or lines of credit.
Amortization in Business Accounting
Businesses often amortize expensive, long-term investments like buildings, machinery, and equipment to spread costs over multiple periods. While this is technically amortization, it is more commonly referred to as depreciation.
For depreciation calculations, visit our Depreciation Calculator.
Amortization also applies to intangible assets, such as patents, copyrights, and trademarks. Under Section 197 of U.S. tax law, businesses can deduct these costs over time. Common amortized intangible assets include:
- Goodwill (company reputation as an asset)
- Going-concern value (value of a business as an ongoing entity)
- Intellectual property (patents, copyrights, formulas, designs)
- Customer & supplier-based intangibles
- Franchises, trademarks, trade names
- Non-compete agreements
- Government-issued licenses & permits
However, some intangible assets, such as self-created goodwill, are not legally amortizable for tax purposes.
Amortizing Startup Costs
In the U.S., startup costs—expenses incurred before a business officially begins—can be amortized under specific conditions. These costs include:
- Consulting fees
- Financial analysis
- Advertising expenses
- Employee payments before launch