See the interest and principal for each payment with this loan amortization schedule. Below, I’ll explain how to create one from scratch. I also include a free loan amortization schedule template for Google Sheets. You can use it to maintain a budget, track expenditures, schedule activities or pay off loans on time.
Table of Contents
An amortized loan is a type of loan that involves periodic payments scheduled over a given period. Payments are applied to both the loan’s principal amount and to the interest.
The process consists of first paying off the relevant interest for the period so that the rest of the payment can be put towards reducing the principal amount.
A loan amortization spreadsheet consists of a schedule of periodic loan payments. The schedule shows the principal amount and amount of interest for each payment from the start till the loan is paid off at the end of the term.
The repayment process consists of paying the same amount in each periodic payment. However, during the start of the process, most of the amount pays off the interest, while towards the end, most of the amount covers the principal amount.
This, in turn, makes the repayment process comfortable for the borrower and reduces the overall cost of the loan.
The last line of the table shows the borrower’s total interest and principal payments for the entire term. Note that you can use this for any type of loan, including student loans or mortgages.
So now that we know the basics, let’s get down to actually building the spreadsheet.
We will first start by creating a basic skeleton of the sheet, in which we will enter the basic timeline, the starting date, the interest rate of the loan, and the total amount to be paid off.
After this, we will create the table and fill in the first two rows with the appropriate formulas. In the end, all we need to do is simply drag down the formulas to fill in the rest of the schedule. The last row should display an amount of 0.0 in the loan balance column.
Let us start with the main spreadsheet outline.
Click File -> Make a Copy, so that you can edit and save your own document.
The top part of the worksheet (rows 1 and 2) consists of all the values that are going to remain constant throughout the loan period:
Let us assume we have a home loan of $100,000 to be repaid in 10 years, with an interest rate of 5%, starting from 06/29/2021. So let us fill these values in the table:
Once this is done, you can start filling in the lower part of the worksheet.
Now it is time to fill in the main part of the worksheet. Here are the columns you will need to fill:
The Period column will consist of the serial number of the payment period. So for the first installment, the period will be 1, for the second installment it will be 2, etc.
Enter 0 in the first row of this column and 1 in the second row.
The Date column consists of dates when each payment is due. In the first row, the date is the same as the starting date (of cell E2). After this, each date will be one month apart (since you are paying off each installment every month).
So in the first row of this column, enter the formula: =E2
In the second row, enter the formula:
=DATE(YEAR(B7),MONTH(B7)+1,Day(B7))
This will return a date exactly one month after the date in cell B7.
Next, we need to calculate the monthly payment for each row. To calculate the monthly payment we can use Google Sheets’ PMT function.
The PMT function calculates the periodic payment for an annuity investment, where the amount and interest rate are constant for each periodic payment.
The syntax for the PMT function is as follows:
PMT(rate, number_of_periods, present_value, [future_value, end_or_beginning])
In our example, here are the values that we will need to plug in:
Since you don’t need to pay the monthly fee on the starting date, this value can be 0.00 for the first row.
In the second row, you can enter the following formula:
=PMT($B$2/12, $E$1*12,$B$1)
We locked all the cell references with $ symbols, because we don’t want these references to get updated when we copy the formula down to the rest of the rows.
Remember, the monthly payment is going to be the same amount for each period. So all the rows of this column will basically have the same value.
Note: The value returned is negative because this is an outgoing payment. In financial terms, outgoing payments are always represented as a negative number while incoming payments are represented as a positive number.
This column will show the interest to be paid in each installment. To calculate the monthly interest payment, we can use the Google Sheets’ IPMT function.
The IPMT function calculates the interest payment for an annuity investment, where the amount and interest rate are constant for each periodic payment.
The syntax for the IPMT function is as follows:
IPMT(rate, period, number_of_periods, present_value, [future_value, end_or_beginning])
In our example, here are the values that we will need to plug in:
Since you don’t need to pay the interest amount on the starting date, this value can be 0.00 for the first row.
In the second row, you can enter the following formula:
=IPMT($B$2/12, A8, $E$1*12,$B$1)
We locked all the cell references with $ symbols, because we don’t want these references to get updated when we copy the formula down to the rest of the rows.
The only reference we did not lock is the second one (representing the period), because this value needs to change with every row.
This column consists of the principal amount that needs to be paid for the current installment. This value can be obtained by subtracting the current interest payment from the current monthly payment value. So, for the second row, enter the formula:
=C8-D8
The first row will again carry the value 0.00.
This column will hold the amount of loan yet to be repaid. This value can be obtained by subtracting the current principal payment from the previous loan balance.
In the first row, since no money has been paid yet, this value will contain the entire principal amount (or a reference to cell B1).
In the second row, the value will be:
=E8+F7
Since the Principal payment amount is a negative number, we used the ‘+’ sign, instead of ‘-‘.
Once you have the first two rows filled in, all that’s left to do is copy down the values to the rest of the rows. Do this by selecting the entire row and pulling down the fill handle to the number of rows needed.
This means, if you have to repay the loan in 10 years, you should have 10*12=120 rows.
Your last row should have a loan balance of 0.0.
The last row of the amortization table should show the borrower’s total interest and principal payments for the entire term.
The total interest can be calculated by summing up the values in column D . So in cell C129 enter the formula:
=SUM(D7:D)
The principal payments for the entire term is calculated by summing up the values in column E. So in cell C130 enter the formula:
=SUM(E7:E)
Your loan amortization schedule Google Sheets spreadsheet is now ready, and since the formulas have been interlinked with the appropriate cell references, any changes in the principal amount, interest rate, term, or starting date will get automatically updated everywhere.
You’ll need to use a combination of the following financial functions, you could consider each a G oogle Sheets amortization formula:
Alongside quite a few standard functions. You can learn how to build one in this article, or simply download our template.
There is no default loan amortization schedule in Google Sheets. But, you can build one from scratch or use a template like the one in this article.
Yes, it’s relatively straightforward to make your own amortization schedule in Google Sheets once you understand the PMT function.
To calculate loan payments in Google Sheets, you need to use the PMT function.
The PMT function calculates the periodic payment for an annuity investment, where the amount and interest rate are constant for each periodic payment.
The syntax for the PMT function is as follows:
PMT(rate, number_of_periods, present_value, [future_value, end_or_beginning])
There are three necessary components of an amortization loan schedule. They are:
Yes, Google Sheets does have a PMT function. It works similarly to the equivalent function in Microsoft Excel.
Access the template here, with all formulas included. Again, simply click File -> Make a copy. Now you can add in whatever custom data you like and the formulas will automatically update.
This amortization schedule in Google Sheets can be easily customized to any kind of loan. All you need to do is customize the values to suit your requirements. We hope this was helpful.
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