1. What is Credit Card Loan Amortization?

Credit card loan amortization shows how each payment is split between principal and interest over the life of the loan. It helps borrowers understand how much they're paying in interest and how the balance decreases over time.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• Outstanding Balance — Remaining principal at start of month ($)
• R — Monthly interest rate (APR / 12, as a decimal)
• EMI — Equated monthly installment ($)

Explanation: The EMI is calculated first, then each payment is split between interest (based on current balance) and principal (the remainder).

3. Importance of Amortization Schedule

Details: Understanding your amortization schedule helps you see how much interest you're paying over time and how extra payments can reduce total interest costs.

4. Using the Calculator

Tips: Enter the loan amount, annual percentage rate (APR), and loan term in months. The calculator will show your monthly payment and full payment schedule.

5. Frequently Asked Questions (FAQ)

Q1: How does APR affect my payments?
A: Higher APR means more of each payment goes toward interest rather than principal, increasing total repayment cost.

Q2: What happens if I make extra payments?
A: Extra payments reduce principal faster, decreasing total interest paid and potentially shortening loan term.

Q3: Why does interest decrease over time?
A: As principal decreases, the interest portion of each payment becomes smaller since it's calculated on the remaining balance.

Q4: Are there prepayment penalties?
A: Some credit cards may have prepayment penalties - check your cardholder agreement.

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual payments may vary slightly due to rounding or specific lender policies.