Loan Amortization Schedule
Five inputs — amount, rate, term, start date and any voluntary overpayment — produce the instalment and a month-by-month schedule showing how each payment splits between interest and principal, how fast the balance falls, and what the loan costs you in total.
The instalment itself is the easy part, and the bank will have told you already. What the schedule shows is where the money goes. On the sample loan of 120,000 over five years at 11.5%, the first payment of 2,639.11 is 1,150 of interest and only 1,489.11 of repayment: 43.6% of it is rent on the money, not progress against the debt. That ratio improves every month, which is why paying extra early is worth far more than paying extra late.
The overpayment column is the reason to keep the sheet rather than trust the bank's figure. An extra 200 a month on that loan clears it in 55 months instead of 60 and saves 3,766 of interest — a 34% return on the 11,000 of extra cash put in, which the template calculates for you so you can compare it against what the same money would earn inside the business. Sometimes it loses that comparison, and the sheet is the only way to find out.
There is also the cost nobody quotes. Interest over the full term comes to 38,347 on the sample, or 32% of the amount borrowed, and arrangement fees sit on top of that. Expressed per 1,000 borrowed it becomes a figure you can hold two offers against, which matters because a lower rate over a longer term is frequently the more expensive loan.
The last block is the one lenders look at: operating profit available for debt, divided by the monthly commitment. Below 1.25 times the instalment is thin, and one weak month comes out of working capital instead. That is a cash-flow question rather than a loan question, and Finmap answers it from the other direction — showing the payment inside your forecast alongside everything else leaving the account that month.
