Loan Amortization Schedule in Excel

A loan amortization schedule template along with step-by-step instructions.

by Dheeraj Vaidya CFA FRM
Co-founder & CEO @ eduCBA & founder of WallStreetMojoFollow 112

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Description
Loan Amortization is the paying back off of a loan or debt amount in terms of instalments that are spread over a particular period of time. We can get a better understanding of this by taking an auto loan or home loan two of its examples. For an auto loan or a home loan, the lender pays off the amount in many instalments, which are then divided into small amounts to be paid over a much longer period of time by creating a loan amortization schedule.

To begin with, the first few instalments that are paid out will go as the interest to be paid. Later, in due course, the instalment amount paid will begin to compensate the initial loan amount.

This way, both interest and the principal amounts to be paid against the loan borrowed by the lender are covered, within the period of payback.

This is the basic idea and also applies in the case of a business organization opting for debts to carry out certain parts of its operation. This can help the firm run their business smoothly, will less risk and financial crisis.

This template comes with a set-by-step methodology that will allow you to do Loan Amortization Schedule in Excel with ease.

This Best Practice includes
1 Loan Amortization Schedule in Excel & 1 Methodology