Loan Payment Calculator
Two people can borrow the same amount at the same rate and still pay wildly different amounts of interest, because the repayment structure does most of the work. This calculator covers the three structures used across Korean retail lending — amortized (equal total payment), equal principal, and interest-only with a balloon at maturity — and shows the monthly payment and lifetime interest for each. Enter the loan amount, annual interest rate, and term in years, and the numbers appear immediately, so you can compare offers or stress-test a repayment plan. Every figure in the examples and comparison table below was produced with the same formula this calculator uses (monthly rate = annual rate ÷ 12), so you can reproduce them yourself by typing the inputs in.
Examples
₩300M mortgage · 30 years · 4% (amortized)
Borrowing ₩300,000,000 at 4% over 30 years (360 months) on an amortized schedule fixes the monthly payment at ₩1,432,246 for the whole term. Total repayment comes to roughly ₩515.6 million, of which about ₩215.6 million is interest — 71.9% of the amount borrowed. Break down the very first payment and only ₩432,246 goes to principal while ₩1,000,000 goes to interest; the principal portion does not overtake the interest portion until month 153, twelve years and nine months in. Even after a full decade of payments the balance is still about ₩236.4 million, meaning only 21% of the principal has been retired.
₩30M personal loan · 5 years · 6% (equal principal)
On an equal-principal schedule, ₩30,000,000 over 5 years (60 months) at 6% repays a fixed ₩500,000 of principal every month plus interest on whatever balance remains. The first payment is ₩650,000 (₩500,000 principal + ₩150,000 interest) and each subsequent payment falls by ₩2,500, ending at ₩502,500. Total interest is ₩4,575,000 and total repayment ₩34,575,000. Run the identical loan as an amortized schedule and you get a level ₩579,984 per month with ₩4,799,043 of interest — ₩224,043 more than the equal-principal route.
₩100M jeonse deposit loan · 2 years · 4% (interest-only)
Jeonse is Korea's lump-sum housing deposit system: the tenant hands the landlord a large deposit instead of monthly rent and gets it back at the end of the lease, so loans used to fund it are almost always interest-only. Borrow ₩100,000,000 at 4% for two years and you pay ₩333,333 of interest every month (₩100M × 4% ÷ 12) while the principal never moves. Over 24 months that is ₩8,000,000 of interest, and at maturity you repay ₩100,333,333 — the full principal plus the final month's interest, funded by the returned deposit.
Prepaying early — ₩30M paid into the ₩300M mortgage in year 5
Take the first example (₩300M, 30 years, 4%) and let it run normally for five years. The balance stands at about ₩271.3 million and roughly ₩57.3 million of interest has already been paid. Put ₩30,000,000 against the principal at that point, bringing the balance to ₩241.3 million, and keep the payment at ₩1,432,246 — the term-shortening option rather than the payment-reducing one. The remaining 300 months collapse to 248, a saving of 52 months (4 years 4 months), and the interest still to come drops from about ₩158.3 million to about ₩113.7 million. A ₩30 million payment buys roughly ₩44.7 million of avoided interest. Any prepayment fee still in force has to be subtracted from that figure before you call it a win.
Repayment methods compared (₩100M · 10 years · 5% p.a.)
| Item | Amortized | Equal principal | Interest-only |
|---|---|---|---|
| First payment | ₩1,060,655 | ₩1,250,000 | ₩416,667 |
| Final payment | ₩1,060,655 | ₩836,806 | ₩100,416,667 |
| Total interest | ₩27,278,618 | ₩25,208,333 | ₩50,000,000 |
| Total repaid | ₩127,278,618 | ₩125,208,333 | ₩150,000,000 |
Principal ₩100,000,000, annual rate 5%, term 10 years (120 months), monthly rate taken as the annual rate ÷ 12. The interest-only final payment is the ₩100,000,000 principal plus the last month's ₩416,667 of interest. Interest-only costs 1.83× the amortized schedule and 1.98× the equal-principal schedule, while equal principal comes in ₩2,070,285 (7.6%) below amortized. Actual bank statements will differ slightly because of day-count conventions, fees, and guarantee premiums.
FAQ
Amortized or equal principal — which one actually costs less?
Equal principal always wins on total interest, because the balance falls faster in the early years. In the ₩100M / 10-year / 5% case above it costs ₩25,208,333 against ₩27,278,618, a gap of ₩2,070,285 or 7.6%. The price of that saving is a first payment of ₩1,250,000 versus ₩1,060,655, about 18% higher. Two questions decide it. Can you absorb the heavier payments of the first three to five years? And will the larger first-year payment push you over your DSR cap — Korean lenders size loans off the first-year repayment, so equal principal can shrink the amount you are approved for at the same income. Stable income with slack in the budget favours equal principal; a predictable fixed outflow, or the need to maximise the approved amount, favours amortized. The longer the term and the larger the loan, the wider the gap between the two.
How is a prepayment fee calculated, and when does it disappear?
Korean lenders typically charge: amount prepaid × fee rate × remaining lock-in period ÷ total lock-in period. Prepay ₩30 million one year into a three-year lock-in at a 1.2% rate and the fee is ₩30M × 1.2% × (2/3) = ₩240,000. The charge therefore decays over time, and most household loans waive it entirely once three years have passed since drawdown. Korean regulators reformed the rules in 2025 so that fees must be based on the lender's actual costs — funding disruption and administration — which pushed bank rates down overall, though they still vary by lender, product, and whether the rate is fixed. Always read the rate off your loan agreement rather than assuming. The decision rule is simple: prepay when the interest you avoid exceeds the fee, which is almost always true early in the loan when there is a lot of interest left to avoid.
How should I choose between a fixed and a variable rate?
Three things settle it. First, the spread. Check how much more the fixed rate costs today; when the gap is under about 0.3 percentage points, the certainty is usually worth paying for. On a ₩300M 30-year loan, moving from 4% to 3.5% — just half a point — cuts lifetime interest from about ₩215.6 million to about ₩185.0 million, a ₩30.6 million difference. Second, your holding period. If you expect to repay or refinance within three years, the lower opening rate on a variable loan usually wins; for a mortgage you will hold ten years or more, fixed or hybrid pricing shuts off the upside risk. Third, the reset frequency. Korean variable loans reprice every six or twelve months against a reference index, normally COFIX, so a longer reset cycle delays the shock. The most practical test: decide the largest monthly payment you could live with, then enter your rate plus two percentage points into this calculator and see whether the result still clears that line.
What is the difference between DSR, LTV, and DTI?
They constrain different things. LTV (loan-to-value) caps borrowing against the property's appraised price — a 70% LTV on a ₩500 million home allows up to ₩350 million. DTI (debt-to-income) measures annual income against mortgage principal-and-interest plus interest on other debts. DSR (debt service ratio) is the strictest: it divides the principal and interest on every debt you hold — mortgage, personal loans, credit lines, car instalments, card loans — by annual income. Someone earning ₩60 million a year under a 40% DSR cap cannot have total annual repayments above ₩24 million, or ₩2 million a month. As of 2026 the standard caps are 40% at banks and 50% at non-bank lenders, layered with a stress DSR that adds a buffer rate on top. Because the applicable percentages, the covered products, and regional LTV limits are adjusted frequently by policy, treat these as starting points and confirm the current rules with the Financial Supervisory Service or your lender.
What does a grace period really cost?
A grace period lets you pay interest only for an opening stretch of the loan, with no principal repaid. The monthly relief is real, and so are the two bills that follow. The principal does not shrink at all during the grace period, so that interest is pure addition; and once it ends you must clear the same principal over a shorter remaining term, which raises the payment. Attach a three-year grace period to the ₩300M / 30-year / 4% mortgage and you pay ₩1,000,000 a month while it lasts, then ₩1,515,625 a month for the remaining 27 years — ₩83,379 more than the ₩1,432,246 you would have paid with no grace period at all. Lifetime interest rises from about ₩215.6 million to about ₩227.1 million, roughly ₩11.5 million extra. Worth it to bridge a defined gap such as a construction handover or a career break; expensive as a default choice.
When does refinancing pay off?
Refinance when the interest saved exceeds the prepayment fee plus the setup costs of the new loan — stamp duty, registering and discharging the mortgage lien, and guarantee premiums. Take a ₩250 million balance with 20 years left on an amortized loan at 5% and move it to 4%: the payment falls from ₩1,649,889 to ₩1,514,951, a drop of ₩134,938 a month, and remaining interest falls from about ₩146.0 million to about ₩113.6 million — roughly ₩32.4 million saved, comfortably ahead of typical costs. The maths turns against you when fewer than three years remain or the rate improvement is 0.3 percentage points or less. Korea's online refinancing platform lets borrowers compare and switch without visiting a branch; before you do, check whether the move resets a prepayment-fee waiver clock you had nearly finished, or forfeits preferential-rate conditions on the existing loan.
How much does my credit score move the rate?
A great deal on unsecured lending. Within a single bank, rate bands separated by credit score routinely differ by two to three percentage points. Borrowing ₩30 million over five years on an equal-principal schedule costs ₩4,575,000 in interest at 6% but ₩6,862,500 at 9% — ₩2,287,500 more for the same loan. Secured mortgages compress the spread, but a 0.2 to 0.5 point difference is still normal. What actually raises a score: never missing a payment, including small amounts by a single day, since the record persists; keeping card utilisation to roughly 30–50% of the limit; avoiding cash advances and card loans, which are scored as high-risk borrowing; and not shopping applications across many lenders in a short window. Korea has two main bureaus, NICE and KCB, and each bank leans on a different one, so it is worth knowing both of your scores before you apply.
Why does my bank's interest differ from this calculator?
This calculator treats every month identically, with a monthly rate of annual rate ÷ 12. Korean banks generally accrue daily instead: balance × annual rate × actual days elapsed ÷ 365. On ₩300 million at 4%, the calculator's monthly interest is a flat ₩1,000,000, but the real bill is ₩1,019,178 in a 31-day month, ₩986,301 in a 30-day month, and ₩920,548 in February. Over a full year the two conventions land close together, yet individual statements move with the calendar. Some lenders divide by 366 in leap years, and the first period after drawdown is usually short and therefore cheap. Layer on guarantee premiums (common on jeonse and policy loans), stamp duty, and lien registration costs and your real outlay lands somewhat above the calculator's figure. To compare products honestly, compare the all-in cost rather than the headline rate.
How the three repayment structures behave
Amortized repayment is engineered so that principal plus interest adds up to the same number every month until maturity. The payment comes from the standard annuity formula: principal × monthly rate × (1 + monthly rate)^months ÷ ((1 + monthly rate)^months − 1). The total holds steady but its composition shifts continuously — interest dominates early, principal dominates late. On the ₩300M / 30-year / 4% loan the opening payment of ₩1,432,246 is ₩1,000,000 interest and ₩432,246 principal, and the principal share only overtakes interest at month 153. That asymmetry is exactly why prepaying early is worth so much more than prepaying late.
Equal-principal repayment slices the principal into equal monthly pieces and adds interest on whatever is left. The first month is the heaviest and each payment then falls by the monthly principal multiplied by the monthly rate. On ₩100M over 10 years at 5% it opens at ₩1,250,000, closes at ₩836,806, and totals ₩25,208,333 of interest — the cheapest of the three. Budgeting around a moving payment is more work, but the declining curve suits borrowers whose income is at its peak now and expected to fall later, such as employees approaching retirement.
Interest-only (bullet) repayment pays interest throughout and returns the whole principal at maturity. Since the balance never moves, every month's interest is identical and the total is simply principal × annual rate × years. On ₩100M over 10 years at 5% that is ₩416,667 monthly and ₩50,000,000 in all, 1.83 times the amortized schedule. Jeonse loans nevertheless use this structure because the deposit is contractually returned at the end of the lease, providing the repayment source. Where no such lump sum is guaranteed, the structure is fragile: a failed rollover at maturity becomes an immediate liquidity crisis.
The choice is ultimately a trade between lifetime interest and early cash flow. Total interest rises in the order equal principal, amortized, interest-only, and early monthly burden falls in exactly the same order. Short terms and low rates compress the differences; long terms and high rates blow them wide open. Switching tabs in this calculator with your own numbers shows how large the spread is in your specific case.
Four ways to cut total interest
First, shortening the term often beats negotiating the rate. Take the ₩300M loan at 4% from 30 years to 20: the payment rises by ₩385,695 to ₩1,817,941, but total interest falls from about ₩215.6 million to about ₩136.3 million — a ₩79.3 million saving, far larger than the roughly ₩30.6 million you would save by cutting the rate half a point. Shorten as far as your monthly budget allows, while checking that the bigger payment does not run you into your DSR cap and shrink the approved amount.
Second, shop the rate properly. Identical borrowers routinely see spreads of more than half a percentage point between Korean banks, and preferential-rate conditions — salary deposit, direct debits, card spend, holding a housing subscription account — commonly knock off another 0.3 to 1.0 points. The Korea Federation of Banks consumer portal publishes lending rates by bank in one place; knowing the market level before you apply gives you something to negotiate with.
Third, prepay early when cash allows. Interest always accrues on the outstanding balance, so cutting principal now reduces the interest on every month that follows. Paying ₩30 million into the ₩300M / 30-year / 4% mortgage in year five and holding the payment steady shortens the loan by 52 months and avoids about ₩44.7 million of interest. Crucially, ask for the term-shortening treatment rather than the payment-reduction treatment — the interest saving is far larger — and state which one you want when you file the request.
Fourth, revisit the loan when rates move. If a product sits at least half a point below your current rate and five or more years remain, refinancing usually clears its costs. Beyond that, mortgage interest can qualify for Korea's long-term mortgage interest deduction at year-end tax settlement when the eligibility conditions are met, which lowers the effective cost further — so weigh tax treatment alongside the headline rate when comparing products.
Choosing a rate type in the Korean market
Korean loan pricing comes in four broad shapes: fixed for the full term, variable, hybrid (fixed for an opening period, then variable), and periodic (repriced on a set cycle). Variable loans are usually indexed to COFIX, the cost-of-funds index that the Korea Federation of Banks publishes monthly. The new-origination COFIX tracks market rates quickly; the balance-based COFIX moves slowly. Two loans described as 'variable' can therefore feel very different, so check which index and which reset cycle your agreement names.
The Bank of Korea's base rate sets the direction, but rather than trying to forecast it, size the downside. If you take a variable rate, add two percentage points to it, run that through this calculator, and confirm the resulting payment is survivable on your income. On the ₩300M 30-year loan, a move from 4% to 6% lifts the monthly payment from ₩1,432,246 to ₩1,798,652 — an extra ₩366,406 every month.
Hybrid pricing is the common compromise: lock the rate for the first five years to stabilise the plan, then refinance if market rates have fallen by the time it floats. Separately, Korea's policy mortgages — Bogeumjari-ron, Didimdol and similar programmes — offer long-term fixed rates below commercial bank pricing to borrowers who meet income and house-price conditions. Check eligibility for those first and use them as the benchmark against which you judge commercial offers. Their qualifying criteria and rates are revised regularly, so work from the current official announcement rather than older summaries.
Reading Korea's lending limits: DSR, LTV, DTI
DSR divides annual principal-and-interest across all of your debts by annual income, and the operative word is all. Mortgages, personal loans, negative-balance credit lines (counted at the approved limit, not the drawn amount), car instalments and card loans are aggregated — which means an untouched credit line still eats into your capacity. If a mortgage application is coming, clearing personal loans and closing unused credit lines is the most direct way to recover headroom. As of 2026 the baseline caps are 40% at banks and 50% at non-bank lenders, with exceptions and add-ons depending on the product and prevailing policy.
The stress DSR adds a buffer rate on top of the actual rate when sizing variable-rate loans, on the reasoning that rates may rise. Repayments are assessed at the inflated rate, so at identical income a variable-rate borrower is approved for less than a fixed-rate one. The buffer has been phased in progressively and applies differently by region and loan type, so the only reliable number is the one your bank's limit-check service or loan officer gives you.
LTV constrains against collateral value and DTI against income measured on mortgage repayments plus other-debt interest. All three tests apply simultaneously and the binding limit is whichever produces the smallest number: if LTV permits ₩350 million but DSR permits only ₩280 million, you can borrow ₩280 million. LTV ratios in particular swing with whether the property sits in a regulated zone and whether you are a first-time buyer, a non-owner, or already hold a home — and Korean property policy changes these frequently. Re-check the current rules through the Financial Supervisory Service's FINE portal or your lender before signing a purchase contract.
Sources
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