Overview

The Loan Interest Calculator computes monthly payments and total interest for equal payment (amortized), equal principal, and bullet repayment methods. Enter the loan amount, interest rate, and term to compare repayment schedules side by side. This tool supports various loan types including mortgage loans, personal credit loans, and jeonse deposit loans commonly used in Korea. You can simulate different interest rate scenarios to assess your repayment burden in advance. The equal payment method offers predictable monthly budgets, equal principal repayment saves total interest cost despite higher initial payments, and bullet repayment is suited for those who want maximum cash flow flexibility during the loan term. Always compare multiple repayment methods before committing to find the best fit for your financial situation.

Formula

Equal Payment Monthly = Principal × r × (1+r)^n / ((1+r)^n - 1), where r = monthly rate, n = number of payments. Equal Principal Monthly = Principal / n + Remaining Balance × r. Bullet = Principal × r (interest only).

How to Use

1. 1Enter the loan principal (amount borrowed).
2. 2Enter the annual interest rate (%).
3. 3Set the loan term in months.
4. 4Select the repayment method (equal payment, equal principal, or bullet).
5. 5Click Calculate to view monthly payments and total interest.

Examples

Background

Korea's lending market underwent dramatic changes after the 1997 Asian financial crisis. From the 2000s, mortgage lending surged and household debt became a major social issue, prompting the government to progressively tighten regulations through LTV, DTI, and DSR caps. The Bank of Korea's base rate stayed low after the 2008 global financial crisis but rose sharply from 2022, significantly increasing household interest burdens. As of 2024, mortgage rates range from 3.5–5% and personal credit loan rates from 4–7%. Comparing fixed, variable, and hybrid rate structures alongside repayment methods is essential for choosing the right loan product.

Tips

• ✔Equal payment (amortized) loans offer predictable monthly budgeting.
• ✔Equal principal repayment costs less total interest but has higher initial payments.
• ✔Check prepayment penalty terms — paying off early can save significant interest.

FAQ