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The short answer
An amortisation schedule is the month-by-month table of a loan: for each payment it shows the opening balance, the interest charged, the principal repaid and the balance left. Interest is front-loaded because it is charged on the balance, which is highest at the start. On our ₦250,000 six-month example at 3% a month, interest is ₦7,500 of the first payment but ₦1,344 of the last.
The columns, one by one
- Period or due date
- The instalment number or the date it is due.
- Opening balance
- What you owe at the start of the period.
- Instalment (or payment)
- What you pay that period. On an equal-instalment loan it stays the same, apart from small rounding in the last row.
- Interest
- Opening balance × the period's rate. This is the lender's charge for that period.
- Principal
- Instalment − interest. The part that actually reduces your debt.
- Closing balance
- Opening balance − principal. It becomes the next period's opening balance.
Some bank schedules also show fees, insurance, VAT on fees, or a cumulative interest column. Fees may be shown separately from the instalment, so read the totals at the bottom carefully.
A full example
Example only. ₦250,000 at 3% a month on the reducing balance, six equal monthly instalments. The instalment from the EMI formula, or =PMT(3%,6,-250000), is ₦46,149.38.
| Month | Opening | Instalment | Interest | Principal | Closing |
|---|---|---|---|---|---|
| 1 | ₦250,000.00 | ₦46,149.38 | ₦7,500.00 | ₦38,649.38 | ₦211,350.62 |
| 2 | ₦211,350.62 | ₦46,149.38 | ₦6,340.52 | ₦39,808.86 | ₦171,541.77 |
| 3 | ₦171,541.77 | ₦46,149.38 | ₦5,146.25 | ₦41,003.12 | ₦130,538.65 |
| 4 | ₦130,538.65 | ₦46,149.38 | ₦3,916.16 | ₦42,233.22 | ₦88,305.43 |
| 5 | ₦88,305.43 | ₦46,149.38 | ₦2,649.16 | ₦43,500.21 | ₦44,805.22 |
| 6 | ₦44,805.22 | ₦46,149.38 | ₦1,344.16 | ₦44,805.22 | ₦0.00 |
Total paid: ₦276,896.25. Total interest: ₦26,896.25. Small differences of a kobo come from rounding. Notice that the principal column adds up to exactly the ₦250,000 borrowed, and the interest column adds up to the cost of borrowing. Those two checks are the quickest way to confirm any schedule you are given.
Why interest is front-loaded
Each month's interest is 3% of whatever you owe. In month 1 you owe the full ₦250,000, so interest is ₦7,500, about 16% of the instalment. By month 6 you owe ₦44,805.22, so interest is ₦1,344.16, about 3% of the instalment. Because the instalment is fixed, the principal portion grows each month as the interest shrinks.
The effect is much stronger on long loans. Example only: ₦1,000,000 at 2% a month over 60 months has an instalment of ₦28,767.97. The first payment is about 70% interest. After 30 of the 60 payments, half the time, about ₦644,300 is still owed. Our planned guide on why early repayments are mostly interest goes further.
What the schedule tells you
- Your settlement figure at any point. On a reducing-balance loan, the closing balance after your last payment is close to what you would pay to clear the loan, before any early settlement fee.
- The value of paying early. Interest in later rows is interest you avoid by clearing early. See does early repayment reduce interest.
- Whether the loan is flat or reducing. If the interest column is the same every month, the loan is flat-rate, not reducing balance.
- Total cost. The sum of the interest column plus any fees is what the loan costs.
Schedules that are not equal-instalment
Not every schedule looks like the one above. Three variations are common:
- Equal principal: the principal column is the same each month (here it would be ₦41,666.67) and the instalment falls over time because interest falls. The first payment is the largest.
- Interest-only period or moratorium: early rows show interest with zero principal, or no payment at all, and the closing balance does not move. Later instalments are higher; see interest-only versus principal-and-interest.
- Flat-rate schedules: the interest column shows the same amount every row because it is worked out on the original loan. The schedule may still be called an amortisation schedule, but the cost is higher than a reducing-balance loan at the same stated rate.
Variable-rate loans add one more twist: if the rate changes, the bank should issue a new schedule from that date, with a new instalment or a new end date. Keep each version you receive.
How to check a bank's schedule
- Take the opening balance in row 1 and multiply by the monthly rate. It should equal row 1's interest (if the rate is annual, divide by 12 first).
- Instalment minus interest should equal principal.
- Opening minus principal should equal closing, and closing should carry to the next row.
- The final closing balance should be zero.
- The interest column should add up to the total interest stated.
If a row does not reconcile, the lender may be using a different day count (for example actual days in each month), adding fees, or charging differently from what you assumed. Ask the bank to explain. For digital lenders, the FCCPC's 2025 regulations require interest rates, repayment terms and fees to be disclosed before the loan is completed (Regulation 17(a)). To rebuild a schedule yourself, follow our guide to building a loan calculator in a spreadsheet; Microsoft's documentation for PMT notes that it covers principal and interest only, so fees must be added separately.
Where Pryme fits
For Loans on Spaces, lent by Solid Allianze Microfinance Bank Ltd for spending with Spaces merchants, the agreement you accept shows the amount, cost and repayment date in full. See Loans on Spaces.
Questions people ask
What is an amortisation schedule?
A table showing each loan payment split into interest and principal, with the balance before and after. It shows how the loan is paid down over time.
Why is most of my loan payment going to interest?
Interest is charged on the balance, which is highest at the start, so early payments are mostly interest. The share falls as the balance falls.
How do I get my loan repayment schedule from my bank?
Ask your bank or relationship officer for the loan's repayment schedule or statement. Many banks include it with the offer letter.
How can I check my bank's loan schedule is correct?
Multiply each opening balance by the monthly rate to check the interest, then confirm principal, closing balance and totals reconcile row by row.
Sources
- Microsoft Support: PMT function · accessed Oct 2026
- Google Docs Editors Help: PMT · accessed Oct 2026
- FCCPC: Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations 2025 · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.