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What You Should Know About Amortization Schedules and Payment Schedules

It’s understood that one way or another, anyone who accepts either small business funding or a small business loan, repayment will need to be made. There are different options available to you when it comes to repaying your funding partner, but how familiar are you with an amortization schedule and the ins and outs of a payment schedule?

In this post, we’ll walk-through the following:


  • What is an Amortization Schedule?

  • How to Interpret an Amortization Table

  • Creating Your Own Amortization Table

  • What is a Payment Schedule?

  • What Are the Key Differences Between Amortization and Payment Schedules?

  • How to Find My Amortization Schedule


What is an Amortization Schedule?

According to Investopedia, the definition of an amortization schedule is, a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.’

In a scheduled amortization, your amortization payment is composed of both the principal payment and the interest charged by the lender.

How to Read an Amortization Table

An amortization schedule shows what percentage of each payment goes toward the principal and how much is going to the interest. Amortized payment requests will also include any outstanding balances still left on a funding advance or traditional loan.
For example, the first few lines of an amortization schedule for a $250,000, 30-year fixed-rate mortgage with a 4.5% interest rate looks like this:



There are plenty of ways to create an amortization table, but for the purpose of this blog, we’ll be using a generic one any of you can find on Google Sheets. If you’re looking to create your own amortization calendar or answer the question of, ‘what would my amortization schedule look like?’, this free Google Sheet will point you in the right direction.

So what does an amortization table show? For starters, let’s start with amortization schedule interpretation. In the far left column, you’ll see the payment period, starting at 1, and ending with the last payment of your funding (for the purposes of this blog, we stopped after a dozen amortized payments). In this amortization table, the customer is paying back a 30-year mortgage loan. This home loan has monthly payment periods and an amortized payment schedule featuring 360 payment periods. It may seem like a large number, but it’s amazing how many memories you can fit into a short 30 year period.

Column two displays the dates your payments are due. Paying on time and in full helps your business credit stay in the good graces of the credit bureaus. Maintaining a strong credit score is key to so many business opportunities, so be sure to avoid any late payments whenever possible.
The beginning balance, in the sixth column, is pretty self-explanatory: it’s exactly how much of the loan you have left to repay based on a given place in time.
The third column shows the total of what you’ll be paying over a given period, with columns four and five displaying how much principal and interest were paid, respectively. As is the case with all amortization schedules, notice how the principal payments are a lower percentage of the total payment compared to the interest column. As amortization is paid out, the cumulative payment totals increase, the principal percentage goes up and percentage of interest decreases.

Great, so now we know a little more about amortization schedules – but what about payment schedules?

What is an Amortization Schedule?

When compared to an amortization schedule, a payment schedule is simply a payback schedule that indicates when and where you’ll need to make repayments. Each schedule clearly shows the dates of your payments, similarly to the way we broke down the amortization table in the last section.

One thing a payment schedule doesn’t do is show you how your payment breaks out between principal and interest. A payment schedule is perfect when you need to get right to the point but if you’re someone who needs additional information, you’re out of luck. Payment schedules are direct but not as enlightening for the borrower.

The Key Differences Between Amortization Schedules and Payment Schedules

Ultimately, payment schedules are really just that – a schedule telling you exactly how much your schedule payment is for and when it’s due. There’s not much else to add to it, aside from redefining it as a calendar of payment dates. As we discussed above, if you’re a data junkie or just simply need more information about what you’ve borrowed, EMI amortization schedules offer borrowers transparent financial terms.

Using an amortization table gives you information about how much interest you have left to pay and how much you’ll pay over the course of an online business loan or funding alternative to a traditional bank loan. While a payment schedule is useful for getting a sense of what the barebone requirements are, an EMI amortization schedule will always provide the principal amount, amortized amount, and a slew of other informative details.

Another major difference between payment schedules and scheduled amortization? The impact amortization prepayments have on your total payment. 

The Impact of Prepaid Amortization

If you want to pay off your online business loan or small business funding faster than you’ve agreed to, you’ll have to pay more than required during each payment period. This practice is known as principal prepayment. Making such additional payments moves you “ahead” in the amortization schedule, which is visualized in your amortization table. This feature further differentiates amortization tables from payment schedules.

Whenever you take a look at your amortization schedule, look at the figure at the bottom of the interest column. If you were to follow your schedule by the book, that is the amount of total interest you would pay during the lifetime of the loan or a merchant cash advance.

To continue to use the example table from earlier, let’s say your first mortgage payment of $1,278,99 (which is $15,347.89 divided by 12). While you still have 359 out of 360 monthly payments left to go, do you know just how much money it would take to eliminate a full payment? In our example, it would take an additional $100 in principal payment each month to fully remove the 360th (and final) payment.

This early amortization gives borrowers a sense of just how much power they have when it comes to reducing their total repayment. While you will still be repaying the overwhelming majority of the interest back to your funding partner, saving $2,000 sure does sound like something we’re interested in.

Remember, if you’re interested in paying off your loan to avoid incurring the higher interest fees, it only works if you add additional monies to the principal payment. Paying off your principal while your interest is still higher is the optimal time to do so. The scheduled amortization of your repayment will only truly shift if you’re able to contribute during the early parts of your amortization schedule.

Having the option to pay off a loan or merchant cash advance early, with a full prepayment, or at least make partial prepayments, is very attractive as long as your cash flow allows for it. Make sure your review your loan and/or funding agreement carefully to see how prepayments are applied. At Fast Capital 360, for example, we never penalize any customer who is looking to make a prepayment. The way we look at it, if someone is in a position to repay their small business funding earlier, this means things are going really well – and we love supporting that kind of growth and stability!
Unfortunately, there are some lenders that apply prepayment penalties to borrowers. In some cases, these penalties completely wipe out any benefits that come with paying off your loan early, hence why it’s so important to review the fine print of your loan and/or online business funding agreements.

The Impact of Prepaid Amortization

Want to know the easiest way to find your amortization schedule? Just ask for one from your funding partner. Really, it’s that simple.

Your amortization schedule will include any fine print of your loan agreement, which as we’ve stated you’ll want to read carefully.  Some programs only allow for “discounts” on the interest you would have paid as opposed to avoiding the remaining interest in the first place.

It’s worth noting that there are some lenders who can provide payment schedules but not amortization schedules. If these companies allow borrowers to submit prepayments, however, it’s common that they’ll discount your remaining total (principal and interest).

Actually, I Want to Build My Own Amortization Schedule

That’s great, too! We encourage everyone to gain a greater understanding of their financial situation and take control of it. If you’re ready to take on your own amortization table, have at it! Take a look at this free Google Sheet for an idea of how to set it up and where the formulas need to be.

The more you know about amortization schedules and payment schedules, the better prepared you are to make the best financial decisions regarding your business and your future borrowing needs.

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