What Is A Personal Loan Amortization Schedule?

Amortization is used in relation to the act of settling a debt over a pre-fixed period by way of instalments. Know about the personal loan amortization schedule here!

26 Oct,2022 18:28 IST 6 views
What Is A Personal Loan Amortization Schedule?

When it comes to getting quick money when one is falling short, nothing can be better than a personal loan. Not only is a personal loan uncollateralized—meaning no asset needs to be pledged—it can also be applied for easily and online from anywhere.

Moreover, once all the documents have been submitted and verified, a personal loan can be disbursed quickly in the borrower’s bank account. Even the repayment process is just as simple and convenient, and most good lenders allow for flexible repayments, which can be made online.

What Is Loan Amortization?

Each time one avails a personal loan, the principal amount of the debt needs to be repaid along with the interest accrued or due over the specified time period or tenor. This process of scheduling the payments of debt and interest is called amortization.

‘Amortization’ is basically the settling of debt over a fixed period of time in instalments. Amortization essentially lets the borrower get a better understanding of the recurring instalments and how their debt is being repaid over time.

In gaining this understanding, a personal loan amortization calculator helps as it helps the borrower get an understanding of the amortization schedule applicable to their loans. Such amortization calculators are often clubbed with EMI loan calculators.

Loan Amortization Schedule

When one opts for a personal loan, they need to repay the amount over equal monthly instalments, or EMIs, over a certain period, which could be up to 60 months.

The complete process of repayment, which comprises the payable EMIs, and the principal and interest on each such instalment, can be summed up in a loan amortization schedule.

An amortization schedule is a table that shows the difference between the principal and interest components of each EMI that is paid while repaying the loan.

The amortization schedule helps the borrower plan their repayments efficiently. It also helps them compute their financial benefits from the loan if they choose to opt for facilities like balance transfer.

At the beginning of the repayment period, the interest component is usually high. Over time, as the loan gets repaid, the interest component begins to come down.

So, towards the end of the repayment period, the interest component of the EMI is negligible and the principal accounts for a bulk of the instalments.


As someone looking to take a personal loan it would make sense to approach a well-reputed and established lender like IIFL Finance as you will get access to helpful information about your loan repayment using tools like an amortization schedule.

In fact, this is just one of several valued-added services that the likes of IIFL Finance provide their customers, even as they also offer some of the most competitive interest rates in the market. IIFL Finance personal loans start from as little as Rs 5,000 and go as high as Rs 5 lakh for tenors stretching from three months to 42 months. Moreover, the loans require only a handful of basic documents and are approved within a few minutes.

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