An Amortization Calculator is a financial tool that provides a detailed, payment-by-payment schedule of how a loan is paid off over time. It's incredibly useful for understanding the inner workings of a loan like a mortgage, auto loan, or personal loan. The schedule shows precisely how much of each monthly payment goes towards paying down the principal balance and how much is allocated to paying interest. This can be very insightful, especially in the early years of a loan when a large portion of the payment goes to interest. To generate a schedule, you need to input the 'Loan Amount', the 'Annual Interest Rate', and the 'Loan Term' in years. This calculator also includes a powerful feature that allows you to see the impact of making extra payments. You can enter an optional 'Monthly Prepayment' amount. Making even small additional payments can dramatically reduce the total interest you pay and shorten the life of the loan. After you click 'Calculate Schedule', the tool will first display a summary of your loan, including your standard monthly payment, total interest, and total payments. If you added a prepayment, it will also show you how much interest and time you've saved. Below the summary, a detailed 'Amortization Schedule' table is generated. This table lists every single payment by month, showing the breakdown of principal and interest, and the remaining balance after each payment. You can scroll through this table to see the entire life of the loan.