What is an interest-only loan calculator?
An interest-only loan calculator estimates the monthly payment during the interest-only period, the later principal-and-interest payment, total interest, and the payment increase when repayment begins.
Interest-only payment calculator
Free Interest Only Loan Calculator
An interest-only loan calculator estimates the lower payment during the interest-only period, the later principal-and-interest payment, total interest, and the payment shock when repayment starts.
Interest-only payment
$1,625.00
Repayment payment
$2,025.62
Payment shock
$400.62 payment jump
Calculator inputs
Model an interest-only period
Loan terms
Balance, rate, and fees for the loan you are comparing.
Repayment structure
How long payments stay interest-only before principal starts.
Results
$1,625.00 now, $2,025.62 later
The interest-only structure lowers the early payment but delays principal repayment, adding $22,552.98 of interest versus amortizing the full term from day one.
Interest-only period
60 months
Repayment period
300 months
Origination fee
$3,000.00
Total paid with fees
$708,186.45
Year-by-year estimate
Payment path
| Year | Phase | Paid | Interest | Balance |
|---|---|---|---|---|
| 1 | Interest only | $19,500.00 | $19,500.00 | $300,000.00 |
| 2 | Interest only | $19,500.00 | $19,500.00 | $300,000.00 |
| 3 | Interest only | $19,500.00 | $19,500.00 | $300,000.00 |
| 4 | Interest only | $19,500.00 | $19,500.00 | $300,000.00 |
| 5 | Interest only | $19,500.00 | $19,500.00 | $300,000.00 |
| 6 | Principal and interest | $24,307.46 | $19,354.16 | $295,046.70 |
| 7 | Principal and interest | $24,307.46 | $19,022.43 | $289,761.67 |
| 8 | Principal and interest | $24,307.46 | $18,668.48 | $284,122.70 |
How to use it
Compare early payment relief with long-term cost
Interest-only loans can make a payment look affordable at the start. The important question is whether the later payment jump and extra interest still fit your budget.
1
Enter the loan balance
Add the amount borrowed before fees so the calculator can estimate interest-only and repayment-period payments.
2
Set the interest rate and terms
Enter the annual rate, interest-only years, and the repayment years that follow.
3
Review payment shock
Compare the interest-only payment with the later principal-and-interest payment.
4
Compare total interest
Use the fully amortizing comparison to see how much extra interest the interest-only structure may cost.
Related tools
Continue comparing loan options
FAQ
Interest-only loan questions
How do you calculate an interest-only payment?
Multiply the loan balance by the annual interest rate, then divide by 12. For example, a $300,000 loan at 6.5% has an interest-only payment of $1,625 per month.
Why does the payment rise after the interest-only period?
During the interest-only period, the principal balance does not go down. When repayment starts, the same balance must be amortized over the remaining term, so the monthly payment usually rises.
Is an interest-only loan cheaper than a normal loan?
It can have a lower early payment, but it usually costs more interest over the full term because principal repayment is delayed.