At some point, we all find ourselves caught in the trap of certain kinds of loans, sometimes so casually that we dive in headfirst without realizing the full impact. It’s only when the numbers add up that reality hits us hard. My student loans, car loans, and credit card debt all accumulated into a sum that felt like a mini heart attack. While the common advice is to pay off debt gradually over time, the reality is that with interest and other financial factors in play, this approach doesn’t always make sense.
What you need is a clear strategy, one that considers your income, interest rates, and the optimal timeline for becoming debt-free without sinking deeper into the cycle. In this article, I’ll explain loan amortization and how you can organize your numbers to efficiently and quickly pay off your loans.
What are Loan Amortization Variables in Excel
In theory, amortization is the process of repaying a loan through equal installments over a set period. Each payment is divided into two parts: one portion goes toward reducing the principal (the original amount borrowed), while the other covers the interest charged by the lender.
In the past, periodic payments and interest were calculated manually on a ledger; a method that was both time-consuming and prone to human error, especially for loans with longer terms. Today, using tools like Excel and its advanced functions, including the amortization formula Excel, you can quickly generate an entire amortization schedule with much greater accuracy.
From my experience, understanding the key variables and how they interact makes it easier to grasp the concept of loan amortization, which then simplifies applying it in real life. Here are the fundamental elements:
Loan Amount (Principal): The original sum borrowed.
Interest Rate: The annual rate charged by the lender.
Loan Term: The total duration of the loan (for example, 15 or 30 years).
Payment: The fixed amount paid in each period.
Period Frequency: How often payments are made (e.g., weekly, monthly, biannually, or annually).
Balance: The remaining principal after each payment.
Interest Paid: The portion of each payment that covers the interest.
Principal Paid: The portion of the payment that reduces the outstanding loan balance.
Extra Payments (Optional): Any additional payments made to lower the principal faster.
Using a Simple Excel Loan Amortization Template in WPS
Managing financial calculations and keeping track of payments can be challenging, especially if you just need a quick solution to maintain your amortization schedule and keep everything organized in one place. For situations like these, I found amortization table templates by WPS Office to be a much more practical solution.
These templates are designed by professionals, and as soon as I started using one, I experienced not just convenience but also a well-structured table that eliminated the frustration of designing a basic template from scratch. Instead of spending time creating an amortization schedule manually, I had access to a polished, ready-to-use format that provided the best possible solution instantly.
Let me walk you through loan amortization table templates on WPS Office; how you can download, edit, and maintain your amortization schedule offline.
To get started, let's first find the amortization table template to work with and see how we can download one for ourselves:
Step 1: Let's head over to the WPS Templates website on our browser, where you can access thousands of professionally built templates.
Step 2: Once on the website, use the search bar and look for "Loan Amortization" to find all available templates related to loan amortization.
Step 3: Now, scroll through the templates and click on the one that best suits your needs.
Step 4: On the next page, you will have the option to either edit the template online using WPS Office's built-in cloud spreadsheet tool or click on “Download” to download the template for offline use.
With this, we now have a free Loan Amortization Table template in just a few clicks!
Next, we need to edit the template, which is quite simple if you have all the necessary details of your loan. To keep things simple, I'll be using WPS Spreadsheet; a free alternative to Microsoft Excel with an easy-to-use interface and a more modern, sleek look.
Step 1: So, let's start by first opening the Loan Amortization Template so we can edit it.
Step 2: Now, let's edit the details. You will find the loan details at the top, where you can manually enter the required information by double-clicking on the relevant cell.
As an example, I have used the following details for a small loan:
Loan Amount: $1,000.00
Annual Interest Rate: 5.00%
Loan Period in Years: 5
Number of Payments Per Year: 1
Start Date of Loan: 21-Mar-2025
Step 3: Once you have entered the details, scroll down to view your ready-made amortization table.
The template comes with pre-set formulas and formatting, which means that as soon as you enter your loan details, your loan amortization schedule will be ready instantly.
Often, people make additional payments apart from their regular loan payments to reduce their principal amount sooner. To accommodate this, these templates include an "Additional Payment" field, where you can enter the extra amount you will be paying each period.
Customizing a Loan Amortization Schedule Using the PMT Function in Excel
A lot of times, people prefer using templates for their loan amortization schedules, but if you’re someone who likes to have full control over the details, then building your own schedule from scratch might be the way to go. The good thing is, Excel has built-in functions that make this process much easier.
Before we move on to creating a customized loan amortization table in Excel, let’s examine the PMT formula. For those familiar with finance, this is the formula you use to calculate loan payments:
However, in Excel, while the formula remains the same, it appears slightly different:
=PMT(rate, nper, pv)
As you can see, with Excel's PMT function, you don't need to enter the entire payment formula manually, instead, you simply input your values to create an amortization schedule. Let's break down these variables:
PMT: The calculated payment amount for each period.
rate: The interest rate per period.
nper: The total number of payment periods.
pv: The present value, or the amount borrowed.
With this cleared, let's try creating our own customized loan amortization table Excel . To do this, let’s use an example. Let's assume we have taken a loan of $5,000 at an annual interest rate of 6%, and we are required to pay off this loan over the next 5 years with equal annual payments.
Step 1: Let's open a blank spreadsheet in Excel, and use the first couple of cells; cells A1:B4, to simply enter our loan details.
Step 2: To make calculations easier, we will be adding in a few more cells which will be the "Periodic rate" and the "Total number of Payments".
Step 3: The values for Periodic rate will simply be "Annual Rate / Payments per year".
=Annual Rate cell / Payments per year cell
Note: This makes things easier when your payments are scheduled monthly, bi-annually, or over other terms.
Step 4: The Total number of payments will simply be the product of Loan period and Payments per year
=Loan Period cell * Payments per year cell
Step 5: Now that we have our loan details ready, let's create our Loan Amortization Table header row, which will have the following cells: Period, Beginning Balance, Payment, Interest, Principal, and Ending Balance.
Tip: You can edit your cell styles and font styles to ensure that not only does your table look visually appealing, but it’s also easy to distinguish between different elements.
Step 6: Next, let's move on to the loan amortization table itself. In the first column (Period), simply enter the years over which the loan will be repaid; in our example, that’s from 0 through 5.
Tip: You can use "Borders" to give your table a neat, professional look, making it easier to read.
Step 7: Now move to the next cell, which is the Beginning Balance of Period 1. Here, you will simply enter the Borrowed Amount or select the Borrowed Amount cell.
=Borrowed Amount cell
Step 8: In the Payment column, we will use the PMT function. Type “=PMT” and press "Tab" to select the function, then fill in the necessary arguments.
Step 9: Next, we will enter the loan details in the following order: Periodic Rate, Total Number of Payments, Borrowed Amount, and the Future Value, which will be 0.
=PMT(Periodic Rate cell, Total Number of Payments cell, -Borrowed Amount cell, Future Value(0))
Note: We will use the "-" sign before the Borrowed Amount to ensure we get positive values.
Step 10: To avoid retyping the PMT function for each Payment cell, we will use absolute referencing.
Step 11: Moving to the Interest column, to keep things simple, we will calculate the product of the Beginning Balance and the Periodic Rate, using a relative column reference for the Beginning Balance and an absolute reference for the Periodic Rate.
=Beginning Balance cell * Periodic Rate cell
Step 12: Moving on to the Principal column, this will simply be the difference between the Payment and the Interest paid.
=Payment cell - Interest cell
Step 13: To complete the first row, the Ending Balance will be the difference between the Beginning Balance and the Principal paid.
=Beginning Balance cell - Principal cell
Step 14: Now, let's quickly move to the last function of this amortization table, which is the Beginning Balance of Period 2. Here, we will simply select the cell that contains the Ending Balance of Period 1.
=Ending Balance cell
Note: The Ending Balance of the previous year becomes the Beginning Balance of the current year.
Step 15: Now, let's use the Autofill handle on all our columns (Beginning Balance, Payment, Interest, Principal, and Ending Balance) to populate the remaining cells.
Step 16: To check if your amortization table is correct, verify whether the Ending Balance of the last period is equal to 0.
Troubleshoot: If your Ending Balance is not equal to 0, check whether your referencing is correct. You can always visit WPS Blogs for more Excel tips on absolute and relative references.
And with this, we have successfully created a dynamic loan amortization table in Excel. Now, you can simply modify the loan details, and the amortization schedule will automatically adjust based on your changes.
For example, let's say we have the same loan details: $5,000 borrowed with an annual interest rate of 5%, but instead of repaying it over 5 years, we will now pay it off in 2 years with monthly payments instead of annual payments.
To see our dynamic loan amortization table in action, simply change the “Loan Period” to 2 and the "Payments per Year" value to 12, since we will be making monthly payments.
As you can see, the Total Number of Payments has now been updated to 24. Now, all you need to do is extend your table to accommodate 24 periods, and you will have a complete breakdown of each payment, the principal and interest paid, and the remaining balances for each period.
Creating a Loan Amortization Schedule in Google Sheets
From my experience, both Excel and Google Sheets have their own advantages when it comes to loan calculations. Excel is incredibly powerful, especially with its built-in financial functions and the ability to automate tasks using macros. This makes it a great choice for handling complex calculations and working with large datasets. However, when it comes to real-time collaboration, it can feel a bit limiting since sharing and updating files isn’t always the smoothest process.
Google Sheets, on the other hand, may not have the same advanced automation features, but it still provides all the essential functions, like using formulas similar to Excel’s PMT function, for loan calculations. What really makes it stand out is how effortlessly it allows for real-time collaboration. Being cloud-based means I can share and edit loan schedules with my team instantly, ensuring everyone is always on the same page without having to send multiple versions back and forth.
Let's look at how we can create a similar loan amortization table to the one we made in Excel, using the same example: $5000 borrowed at an annual interest rate of 5%, to be paid annually over the next 5 years.
Step 1: Since Google Sheets is a web-based tool, we need to open our browser and type "sheets.new" in the address bar to create a new blank Google Sheet.
Step 2: The process will be the same, we will fill in the loan details and create a loan amortization table right below. With the table design ready, let’s fill in the values, starting with the Beginning Balance.
Step 3: The Beginning Balance is simply the Amount Borrowed. So, type "=" and then select the cell where the loan amount is mentioned in the loan details section.
=Amount Borrowed
Step 4: Next, we have the Payment column, where we will use the PMT function. To select the PMT function, type "=PMT" and press “Tab” to enable the function in Google Sheets.
Step 5: With the PMT function enabled, select the following cells: Periodic Rate, Total Number of Payments, Amount Borrowed.
Note: Don’t forget to press “F4” to apply absolute referencing to all selected cells.
Step 6: Now, move on to the next column to calculate Interest Paid, which will be the product of Beginning Balance and the Periodic Rate, but with a Relative Column Reference on Beginning Balance and an Absolute Reference of Periodic Rate.
=Beginning Balance * Periodic Rate
Step 7: Next, we calculate the Principal Paid, which is simply the difference between Payment and Interest Paid.
=Payment - Interest
Step 8: For the last column, we calculate the Ending Balance, which is the difference between the Beginning Balance and Principal Paid.
=Beginning Balance - Principal Paid
Step 9: The table is not complete yet, we need the Beginning Balance for Period 2. Here, we will take the Ending Balance of the previous period. So, type:
=Ending Balance (from the previous row)
Step 10: Now, simply use the Autofill handle to complete all the columns. The final period (Period 5) should show an Ending Balance of 0.
Tip: Google Sheets has a feature called "Suggestions", which detects patterns and suggests copying formulas to other cells in the column. You can either accept these suggestions or use the Autofill handle to fill the table manually.
With Google Sheets, once you have your amortization schedule ready, you can then simply use the "Share" feature to share your table with everyone. Here is how:
Step 1: On your loan amortization sheet, click on the "Share" button on the top right corner.
Step 2: You will now have a Share window pop up. To share your loan amortization with everyone using a link, you will need to change the General access to "Anyone with the link".
Step 3: Now simply click on the "Copy link" button to copy your sheet link, or you can also copy the link from the address bar and share it with others.
Step 4: To have more control over who views your Google Sheet, simply enter the email address of the recipients with whom you wish to share your Loan Amortization sheet.
Step 5: Next, provide limited access, such as a "Viewer" or full access by giving "Editor" access, and then click on the "Send" button to share the link with others via email.
Free Loan Amortization Templates in WPS Office
As mentioned before, loan amortization can get fairly complex. With all the added factors like interest rates, payment schedules, and loan terms, it’s easy to get lost in the details. Keeping track of every number manually can be overwhelming, especially when time is limited. That’s where having a ready-made template comes in handy, it takes care of the tedious calculations so you can focus on understanding the bigger picture rather than getting stuck fixing formulas and formatting.
Dealing with loans is no joke, and WPS Spreadsheet’s loan amortization templates make the process much easier. Instead of spending hours setting up spreadsheets from scratch, you get a structured template that organizes all the necessary details in one place. It’s a simple yet effective way to stay on top of your payments, track interest, and manage your finances with peace of mind.
FAQs
1. What is loan amortization?
Loan amortization refers to the gradual repayment of a loan through scheduled payments, where each installment covers the principal and interest. Initially, a larger share of the payment goes toward interest, while a smaller part lowers the loan balance. As payments continue, the interest amount decreases, allowing more of the payment to go toward the principal. This process continues until the loan is completely repaid.
2. How does the PMT function help in loan calculations?
The PMT function simplifies loan calculations by computing fixed payments required to repay a loan within a set period. It factors in the principal amount, interest rate, and loan duration to determine equal installments. By breaking down payments into principal and interest, this function helps in structuring an amortization schedule and provides a clear outlook on regular payment obligations, making financial planning more manageable.
3. Can I make extra payments using these templates?
Yes, most templates let users include extra payments, which can decrease interest costs and shorten the loan repayment period.
4. Why use WPS Office instead of Excel?
WPS Office is a free alternative to Excel that offers pre-built templates, making it a great option for users who don’t have a Microsoft 365 subscription. It also supports multiple file formats, has an intuitive interface, and provides cloud storage, allowing users to access their documents across different devices.
Effortlessly Pay Off Your Loans
If you’ve taken out a loan, whether it’s for a house, education, car, rent, or even multiple expenses combined; there’s no escaping it. The best approach is to tackle it head-on with a solid plan. Managing your finances more critically, no matter how deep you are in debt, can make a real difference over time. The numbers may seem overwhelming, but progress comes from taking small, consistent steps in the right direction.
WPS Office makes this process easier with its ready-to-use templates designed for budgeting and loan tracking. With structured follow-ups and clear insights into your expenses, you gain better control over your financial situation. Knowing exactly how much to allocate, where to cut back, and how to plan your payments can help you steadily work toward clearing your debt, without the added stress of manually organizing everything yourself.
