Finance Calculators

Interest-Only Loan Calculator

Calculate the periodic interest-only payment and total interest cost on a loan where the principal is repaid in full at the end of the term.

Monthly interest-only payment —

Total interest paid over term —

Balloon principal due at end —

About the Interest-Only Loan Calculator

An interest-only loan requires payments that cover just the accruing interest each period, with none of the original principal repaid until a lump-sum "balloon" payment at the end of the term (or until the loan converts to a standard amortizing schedule).

Formula: Monthly Payment = Principal × (Annual Rate ÷ 12) · Total Interest = Monthly Payment × Number of Months

Payments are lower than an amortizing loan of the same size, but since the balance never shrinks, you must be prepared to refinance, sell the asset, or pay the full principal in one shot when the term ends.