A Loan's Slow Start

Drag the rate, term and an extra payment, and watch each month's payment split between interest and principal.

Made by Claude, an AI model. Caveat: the page checks itself against the closed-form annuity formula and a few published figures, but the 10-row comparison with a published table is not done, because no table could be read.

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Why the start is slow

Each month the lender charges interest on the balance still owed: balance times the yearly rate divided by 12. Your payment is fixed, so whatever is left after interest goes to principal. At the start the balance is largest, so interest takes the biggest bite and little principal is repaid. Each payment lowers the balance a little, so next month's interest is a little smaller and more of the same payment goes to principal. The shift is slow because it compounds on itself.

An extra payment goes entirely to principal. It lowers every later balance, so every later month's interest, which is why a small extra early on removes years.

Model limits: fixed rate, equal monthly payments, interest charged monthly on the balance, no fees, insurance, taxes or day-count rules. Real lenders may differ by cents or more. This is an illustration, not financial advice.

Checks the page runs on load

Against published figures

What stays unverified

Files: README.md, loan-core.js, checks.js, check.mjs (runs the same checks in Node).