Loan Interest Calculator

What's the difference between equal payment and equal principal repayment?

With equal payment, the amount you pay each month (principal + interest) stays the same for the whole loan term. With equal principal, the principal portion you repay each month stays the same, but the interest portion shrinks as the remaining balance decreases — so payments start higher and get smaller over time.

Why does equal principal repayment result in less total interest?

Equal principal repayment pays down the principal at a steady, faster pace, so the remaining balance that interest is calculated on shrinks faster on average than with equal payment. As a result, the total interest paid over the loan term ends up lower.

Is there a legal cap on loan interest rates?

Yes. Under Korea's Interest Limitation Act, the maximum interest rate on private money transactions between individuals cannot exceed 20% per year, and any portion above that is void. Loans through licensed lending businesses are also subject to a separate maximum rate cap under the Registration of Credit Business Act.

Does this calculator include early repayment fees?

No. This calculator only computes principal and interest based on the agreed rate and term, and does not reflect early repayment fees or other handling charges. Check with your financial institution separately for actual fees when planning repayment.

Can I use this for a variable-rate loan?

This calculator assumes a fixed rate for the entire loan term. For a variable-rate loan, you'll need to recalculate based on the remaining balance each time the rate changes to get an accurate payment amount.