Using an Amortization Table

An amortization schedule is a table detailing each periodic payment of an interest bearing loan. It is useful for knowing the true cost of a Loan, the breakout of a monthly payment for principle and interest, and changes in the loan due to additional payments against the principle.

Having an amortization schedule set up for a large loan like a mortgage can help a person make a plan to pay off the loan sooner and thus saving hundreds, or even thousands of dollars.

The downloadable amortization loan schedule for Simple Saving Habits is easy to use. You can use this schedule to analyze a current or future loan. For a current loan, you will need to know the Total Loan value as of today, your minimum monthly payment, and the Interest rate on the Loan. (APR)

A training video is also available on the Simple Saving Habits youtube channel that shows how to use the Amortization Schedule.

https://www.youtube.com/channel/simplesavinghabits

1. Create the schedule by filling out the required Loan fields (Today's Date, Current Loan, APR, and Monthly Payment)
1. If you do not have a current loan, use the box on the right side to estimate a monthly payment based on an expected APR and loan.

2. Loan Summary gives an overall snapshot of the Loan.  The Total Loan represents the Total Cost of the Loan. (borrowed amount + accrued interest). When you pay more than the minimum payment, that money will go against the principle of the loan and reduce the total interest and time  it takes to pay-off the loan.

3. The Loan Schedule shows every payment made until the Loan reaches 0. Important fields to note in the schedule are:
1. Principle and Interest - Each payment is broken down into a value that goes against the principle of the loan, and for interest incurred.  The Principle will always start off lower with the first payment, and increase over time.

1. Cumulative Payments - The shows how much you have paid for the loan at any given period of time.

2. Total Loan Cost - This shows how much the loan has cost at any period in time. It is calculated as total Payments + Remaining Balance of Loan

Ways to Save Money and Pay-off Loans ahead of Schedule

1. Increase the Monthly Payment - Determine an amount that can be paid as extra every month with the minimum payment. Adding $100 dollars each month, can save $33,000 worth of interest, and pay off a mortgage 5 years earlier.

2. Add occasional Payments that vary throughout the life of the loan - If you are unable to commit to a monthly payment increase, use the Extra Payment Column on the Schedule Table to make payments against the loan.  These could represent payments made due to Tax Return refunds once a year.