| Month | Payment | Principal | Interest | Balance |
|---|
Amortization is the process of spreading out a loan into a series of fixed payments over time. While each monthly payment is the same, the portion that goes toward the principal (the original loan amount) vs. interest changes over the life of the loan.
In the early years of a loan, most of your payment goes toward interest. As the balance decreases, the interest charge drops, and more of your payment is applied to the principal. This schedule shows you exactly when that shift happens.