What is an amortization schedule?

Answer 1

a display of the number of payments and the amount of interest that will be paid.

If you are interested in what an amortization schedule is, there are many information websites to help you. However, to answer you question, it is a calculator used to calculate loan payments and how much goes towards the interest and how much goes towards the principal.

Answer 2

Many people like to have an idea how much and how long it will take before they make a big purchase like a home. Today, we can go online and use a Amortization Calculator to estimate what we will need before we do it.

Answer 3

An amortization schedule is a chart that shows mortgage and loan holders exactly how much time and money is required to pay-off a loan. Bankrate has an excellent amortization calculator at http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx?ec_id=m1082525.

Answer 4

A loan amortization schedule is a table that shows the breakdown of the repayments required on a loan. If you pay monthly for your loan, then the schedule will show the amount to be paid each month for the period of the loan.

Answer 5

Finances can be quite complicated for anyone to figure out. This is no different when it comes to lending. One thing many people should learn about for their own financial wellbeing is how to use an amortization schedule. An amortization schedule is what is used to determine the amount of outstanding funds still left to be paid on a loan during a specific point in that loan's history.

These schedules are created because they make determining this outstanding amount quite easy. Each amortization schedule includes a table. This table will have an entry for each payment made towards paying off the principal and interest. Each payment that is made on the loan is actually split between paying off the interest and the principal. An amortization schedule can help a person determine exactly how much is still due on both the principal and the interest.

This all calculated with the help of the amortization formula. This formula can be found online and in many text books. It involves a calculation that includes the interest, principal and the number of periods on the top and bottom of a fraction. The number that is calculated from this formula will be the amortization.

Amortization schedules are used mostly to determine what the compounding interest will be over time. Each time a new payment is made on the loan, the interest needs to be recalculated. This is done because the amount left in the principal is reduced each time a new payment is made.

Using this method of calculation actually has some strong benefits. For one, it results in a lower amount of interest being paid over the term of the loan. This is due to the fact that the principal drops after each period in the schedule.

An amortization schedule is actually composed of five separate columns. The first column is used for marking different specific time periods in the loan's lifespan. This can be months or years. The four other columns are used to record the outstanding amount, each payment, interest level and the amount of the principal that was paid. The outstanding amount is what is used to represent total value of the loan minus any payments that have been made.

Answer 6

An amortization schedule for a loan can look complicated, but they are actually very easy to understand. These schedules are designed to show a borrower or potential borrower how much their monthly payments will be, how much they will have spent in interest, and how much it will cost him or her to pay off a loan early.

Amortization schedules are usually issued along with the rest of the paperwork when applying for a loan. In general, they list out the date of every payment that has to be made in order to pay off the loan. In some cases, each payment is listed with a date, but it is most common to find generic amortization schedules that just list each payment to be made on the loan until it is paid off.

In addition to the payments, these schedules will also show the breakdown of how much interest and principal is being paid with each loan payment. Most loans will have consumers pay more in interest at the start of the loan, then pay less in interest as the principal is reduced. The schedule will also show the consumer the total amount of interest he or she has paid over the life of the loan with each payment, as well as how much principal is left.

A consumer can use their amortization schedule to determine how much he or she still owes at any point in time while paying off a loan. If a consumer has made extra payments, he or she can request an updated amortization schedule that shows the adjusted amounts of interest and principal based on the extra payments. There are also a number of online calculators that will produce amortization schedules based on a loan's interest rate and payment term.

Anyone who is trying to get out of debt should pay close attention to their amortization schedule and use it when making their budget to pay off their debt early.