Loan Payment Calculator
Loan interest varies greatly depending on the repayment method. This calculator supports three methods: amortized (equal total payment), equal principal, and interest-only with a balloon payment at maturity. Enter the loan amount, annual interest rate, and term in years to instantly see your monthly payment and the total interest paid over the life of the loan — useful for comparing loan offers or planning repayment.
Examples
₩300M mortgage, 30 years, 4% (amortized)
Borrowing ₩300,000,000 at 4% for 30 years (360 months) with amortized repayment gives a fixed monthly payment of about ₩1,432,246. The total repaid is about ₩515.6 million, meaning roughly ₩215.6 million in interest alone.
₩100M personal loan, 5 years, 6% (equal principal)
Borrowing ₩100,000,000 at 6% for 5 years (60 months) with equal-principal repayment means paying ₩1,666,667 of principal each month. The first payment is about ₩2,166,667 (including ₩500,000 interest) and the last is about ₩1,675,000, decreasing each month. Total interest is ₩15,250,000.
₩50M interest-only loan, 2 years, 5%
Borrowing ₩50,000,000 at 5% for 2 years interest-only means paying about ₩208,333 in interest each month, then repaying the full ₩50,000,000 principal at maturity. Total interest is ₩5,000,000.
FAQ
What is the difference between amortized and equal-principal repayment?
Amortized (equal total payment) repayment keeps the combined principal-plus-interest payment the same every month. Equal-principal repayment pays the same amount of principal each month plus interest on the remaining balance, so payments start higher and decrease over time. Under the same conditions, equal principal results in less total interest.
Which repayment method is best?
By total interest, equal principal is cheapest and interest-only is most expensive. However, equal principal has the highest initial payments, while amortized payments stay constant, making budgeting easier. If you can afford higher payments early on, choose equal principal; if you prefer a predictable fixed payment, choose amortized.
What is an early repayment (prepayment) fee?
It is a fee charged by the lender when you repay a loan before the agreed term, typically 0.5–1.5% of the repaid amount, prorated by the remaining term. In Korea, most loans waive the fee after 3 years, so check the waiver date and fee rate before planning early repayment.
Should I choose a fixed or variable interest rate?
A fixed rate stays the same for the entire term, which protects you when rates rise and makes repayment predictable. A variable rate usually starts lower but changes with the benchmark rate. Consider a fixed rate for long-term loans or when rates are expected to rise, and a variable rate for short-term loans or when rates are expected to fall.
What is DSR?
DSR (Debt Service Ratio) is the ratio of your total annual loan payments (principal and interest on all debts) to your annual income. For example, if you earn ₩50 million a year and repay ₩20 million a year, your DSR is 40%. Korean banks generally apply a 40% DSR cap, so a higher monthly payment can reduce how much more you can borrow.
Comparing the three repayment methods
Amortized (equal total payment) repayment keeps the monthly payment — principal plus interest — constant for the entire term. Early payments are mostly interest, and the principal portion grows over time. Its predictable payment makes it the most common choice for mortgages.
Equal-principal repayment pays the same principal amount every month (loan amount divided by the number of months) plus interest on the remaining balance. The first payment is the largest and payments shrink each month. Because the principal falls quickly, it has the lowest total interest of the three methods.
Interest-only (bullet) repayment pays only interest each month and repays the entire principal at maturity. Monthly payments are the smallest, but since the principal never decreases, total interest is the highest. It is mainly used for short-term loans where a lump sum is expected at maturity, such as Korean jeonse deposit loans or business working capital.
How to reduce loan interest
Comparing rates has the biggest impact. Rates for the same borrower often differ by more than 0.5 percentage points between banks, so use loan comparison platforms or pre-screening at several banks to find the lowest rate. Also check preferential rate conditions such as salary transfer or card usage, which can lower your rate further.
Use early repayment when you have spare funds. Reducing the principal reduces all future interest, so prepaying early in the loan term has the largest effect. Check the prepayment fee rate and waiver date (usually 3 years) to make sure the interest saved exceeds the fee.
If market rates have fallen, consider refinancing to a lower-rate loan. Also, a shorter term always means less total interest, so shortening the term as far as your monthly budget allows is an effective way to save.
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