Loans

Loan Information, Consolidation, and Calculators

What Is A Loan Amortization Table?

Written By: admin - Feb• 12•13

So, What Is A Loan Amortization Table Anyways?

You may have heard about loan amortization tables. So, what are they? Well, they’re basically a graphical picture of how your loan gets paid off and what amount of interest and principal is paid with each payment.

Ever wonder why your mortgage payment seems so high compared to how much you actually pay off on it each month and your low interest rate? Well, that’s because the banks have it set up in their favor. As you can below on the amortization table, when you first start paying on your mortgage, you’re basically paying almost all on the interest rather than the principal.

amortization table 300x230 What Is A Loan Amortization Table?

It’s not until after 222 months of making payments that more of your money actually goes to pay more principal than interest!

How to pay it off faster:

If this is your fist time actually looking at how a mortgage works, you may be quite upset. However, it’s important to know that if each time you pay your bill every month you pay some extra on the principal, it will in effect advance the amortization schedule, thus allowing more of each payment you make to go toward paying down the principal.

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