How to Calculate Amortization?

Amortization is basically calculating the amount you pay out on a loan over its total life span. The first thing you will need to know is what the total principal amount of the loan is. Using your interest rate, principal balance and the length of the loan term you can figure out your monthly payment. Next, figure out how much of your monthly payment is going towards the interest rate. It is easier to figure these out by using a financial calculator or online spreadsheet.