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Amortization is the schedule of repayment agreed upon when your loan closes. This schedule may last anywhere from one to thirty years (in most cases, fifteen to thirty years). An amortization table allows you to key in the details of your loan in order to give you an estimate of your monthly payments and also the interest that you will be paying on your loan. The more detailed an amortization table, the more helpful it will be to you. Some tables will only be able to give you the amount of your monthly payments, while others will break down the effects each monthly payment has on interest and principal yearly, or even monthly.
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An amortization table can be used to help you decide what you would like as far as down payment, interest rate, and length, or term, of repayment. It is good to have an idea of what you are willing to accept as far as these three components of your loan are concerned. Using our table, you can look at the difference between a 7% interest rate and 9% interest rate and decide that you are unwilling to take any offer from a lender that has a rate higher than 7%, this way you will not walk blindly into a loan that will cause you to pay more than you plan. Also, using an amortization table can help you avoid what is referred to as negative amortization. This is when your repayment schedule sets payments at too low a rate to cover your building interest, causing your principal to increase instead of decrease and costing you a lot of money. Educating yourself on the terms of your loan is the best way to make sure that you do not pay more than is necessary.
An amortization table can help you handle your communication with lenders in confidence and make sure that you are not surprised by you repayment schedule. Use our amortization calculator to prepare for your new loan and fill out our free short form to contact up to four lenders today.
Keep in mind that an amortization table only provides estimates. Your lenders will provide you with dependable information, and it should be remembered that the figures taken from our amortization table should be used solely as a guide. If during your repayment period you miss payments or make late payments frequently, this will cause your repayment schedule to differ from the information provided by an amortization. Also, our table may not process fractions of a penny in the same manner as your lender.
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