Interest-Only Loan Calculator

💰 How This Calculator Works

Calculates payments on a loan where you pay only interest during the interest-only period, with no principal reduction.

🔢 Worked Examples

• $300,000 at 4.5% interest-only → $1,125/month
• After 5 years of interest-only, full amortization of $300k at 4.5% for 25yr → $1,652/month

📋 Common Use Cases

Loan calculators help you understand the true cost of borrowing money — including total interest paid, monthly payments, and amortization schedules. Whether you're financing a car, taking a personal loan, or comparing offers, these tools give you the numbers banks don't always lead with.

• Monthly payment planning before signing a loan
• Comparing fixed-rate vs reducing-balance loan structures
• Calculating total interest cost over the full loan term
• Finding the break-even point for extra payments

💡 Did You Know?

On a 30-year mortgage at 6%, you pay nearly as much in interest as you borrowed. A $300,000 mortgage costs about $647,000 in total payments — $347,000 of that is interest.

⚠️ Common Mistake

Assuming interest-only means the loan eventually goes away — the principal remains unchanged throughout and must be repaid at term or by switching to amortizing payments.