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Interest-Only Loan Payment & Period Cost Calculator

Estimate periodic interest-only payments and total interest while a loan balance remains unchanged.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A 100,000 balance at a 6% annual rate requires 500 in monthly interest under this model. Over two years, interest totals 12,000 and the 100,000 principal remains outstanding.

Interest payment = principal × annual rate ÷ payments per year; total interest = payment × years × payments per year

Worked example

Enter these known values and leave the other values blank.

Unchanged loan principal
100000 USD
Nominal annual interest rate
6 %
Interest payment frequency
Monthly
Interest-only period
2:0 yrs / mos
Interest payment per selected interval
500 USD
Interest over the selected period
12000 USD

Assumptions and limitations

  • Assumes the principal and annual rate stay fixed. Interest-only payments do not reduce the loan principal.
  • The payment frequency divides the annual rate evenly; daily uses 365 periods. Actual contract day counts, payment dates and rounding can differ.
  • Principal, rate and term must be positive. Later amortizing payments, taxes, insurance, fees and any final principal repayment are not included. A years/months entry of 2:0 means two years.

Common questions

How much principal is repaid by these payments?

None. This calculation covers interest only. The original principal remains due unless separate principal payments are made.

What happens after the interest-only period?

That depends on the contract. Payments may increase when principal repayment begins, or a balance may become due. This calculator does not model that later schedule.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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