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Loan Interest Calculator

Compare monthly payments and total interest across different repayment methods.

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Whether it's buying a home, purchasing a car, or funding a business, there are moments in life when you need a lump sum. A loan with a reasonable interest rate can help you reach those goals faster. However, since a loan uses future income as collateral for present funds, careful planning and thorough comparison are essential.

The repayment method you choose has a direct impact on your monthly payments and total interest cost — making it the single most important factor to consider. There are three main methods: Equal Payment, Equal Principal, and Bullet Loan. Each has distinct pros and cons, and your choice can significantly affect your financial plan.

For example, borrowing $100,000 at 5% annual interest for 20 years: under Equal Payment, you'd pay about $660 per month. Under Equal Principal, payments start at about $830 in the first month and drop to about $420 by the last month. The difference in total interest alone can amount to thousands of dollars.

SeriesCalc's Loan Interest Calculator makes this comparison easy. Simply enter the principal, term, and interest rate, and instantly see monthly payments, total interest, and full repayment schedules for all three methods. Whether you're a salaried worker, self-employed, or planning a home purchase, this tool helps you simulate scenarios and choose the best conditions before committing.

Term Glossary

Equal Payment
Equal Payment (Principal & Interest): A fixed amount is paid each month. Early payments are interest-heavy, shifting toward principal over time.
Equal Principal
Equal Principal: A fixed principal amount is paid each month, with interest on the remaining balance. Total interest is the lowest of the three methods.
Bullet Loan
Bullet Loan: Only interest is paid monthly, with the full principal due at maturity. Lowest monthly burden but highest end-of-term risk.

Which Repayment Method Is Right for You?

Each repayment method has distinct characteristics, so the best choice depends on your current income, future income expectations, and financial plans. Below you can see the key formulas and worked examples for each method.

1. Equal Payment (Most Common)

The total monthly payment (principal + interest) stays the same throughout the loan term. Early payments are interest-heavy, but the principal portion grows over time.

Monthly Payment=P×r(1+r)n(1+r)n−1\text{Monthly Payment} = P \times \dfrac{r(1+r)^n}{(1+r)^n - 1}

Example: ₩100M, 5% annual, 20 years → approx. ₩660,000/month

  • Pros: Predictable fixed payments make budgeting easy.
  • Cons: Higher total interest compared to Equal Principal.
  • Best for: Salaried workers with stable income who prefer predictable expenses.

2. Equal Principal (Lowest Total Interest)

The principal is divided equally across months. Interest is calculated on the remaining balance, so payments start high and decrease over time.

Monthly Principal=Pn\text{Monthly Principal} = \dfrac{P}{n}Monthly Interest=Remaining Balance×r\text{Monthly Interest} = \text{Remaining Balance} \times r

Example: ₩100M, 5% annual, 20 years → first month approx. ₩833,000, last month approx. ₩418,000

  • Pros: Lowest total interest of the three methods.
  • Cons: Higher initial payments can be a burden.
  • Best for: Those with extra funds upfront or expecting income decline (e.g., pre-retirees).

3. Bullet Loan (Lowest Monthly Burden)

Only interest is paid each month, with the entire principal due at maturity. Commonly used for short-term loans or jeonse (lease deposit) loans.

Monthly Interest=P×r\text{Monthly Interest} = P \times r

Example: ₩100M, 5% annual → approx. ₩417,000/month interest only, principal repaid at maturity

  • Pros: Lowest monthly payment since only interest is paid.
  • Cons: Highest total interest and a large principal repayment at maturity.
  • Best for: Short-term borrowing needs or when you have a clear plan to repay the principal at maturity.

※ P: Loan principal, r: Monthly interest rate (annual rate ÷ 12), n: Total number of months

Smart Borrowing Tips

  • 1. Check Your DSR First

    DSR (Debt Service Ratio) is the ratio of your total annual loan payments to your annual income — the key metric lenders use today. Calculate your DSR in advance to understand your borrowing capacity. Banks typically require DSR under 40%, and stress DSR rules have tightened further since 2025.

  • 2. Factor in Prepayment Penalties

    If you repay your loan early, the bank may charge a prepayment penalty. This typically applies within the first 3 years, and rates vary by institution. Always check the penalty conditions before signing to avoid unexpected costs.

  • 3. Compare Fixed vs. Variable Rates

    In a rising rate environment, fixed rates protect you from increases. In a falling rate environment, variable rates adjust downward and may save you money. Choose based on your risk tolerance and market outlook.

  • 4. Exercise Your Right to Request a Rate Cut

    If your creditworthiness improves — through a new job, promotion, income increase, or credit score boost — you can legally request a lower interest rate. This is a consumer right guaranteed by law, so don't hesitate to apply if you qualify.

  • 5. Compare Offers from Multiple Lenders

    Don't settle for your primary bank. Use online comparison platforms to review rates and limits across multiple institutions. Even a 0.1% rate difference can translate into significant savings over a long loan term.

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