Calculator/Financial Calculator/ Loan Calculator

Loan Calculator Guide

Monthly payments and total interest vary depending on the loan repayment method. Choose the appropriate repayment method to reduce interest burden and establish an efficient repayment plan.

Understanding Loan Repayment Methods
  • Equal Installment
    The monthly payment amount (principal + interest) remains the same. Initially, the interest portion is larger, and toward the end, the principal portion becomes larger.
  • Equal Principal Payment
    The principal repaid each month remains the same, while interest decreases based on the remaining balance. Initial payments are larger and gradually decrease.
  • Bullet Payment
    Only interest is paid during the loan period, with the principal repaid in a lump sum at maturity. Monthly payments are low, but the total interest burden is the highest.
  • Increasing Payment
    Payments start low and gradually increase. Suitable for those who expect their income to increase in the future.
  • Decreasing Payment
    Payments start high and gradually decrease. Suitable for those approaching retirement or expecting a decrease in income.
Understanding Financial Concepts
  • Interest Rate and APR
    Nominal interest rate is the simple stated rate, while the effective interest rate (APR) is the actual cost rate including fees.
  • Grace Period
    A period when only interest is paid without principal repayment. Reduces initial repayment burden but increases total interest.
  • Prepayment Penalty
    A fee charged when repaying principal before the contracted maturity date, typically 1-2% of the prepaid amount.
  • DTI (Debt-to-Income Ratio)
    The ratio of annual debt payments to annual income. Generally recommended to maintain below 40-60%.

Enter Loan Information

10 million ~ 1 billion won
1 year ~ 40 years or 1 month ~ 480 months
0.1% ~ 20.0%
0 years ~ 10 years
$

Frequently Asked Questions

Equal principal payment has a lower total interest burden but higher initial payments. If you have limited initial funds, equal installment is better; if you want to minimize interest burden, equal principal payment is advantageous.

If market interest rates are trending upward, fixed rates are advantageous; if declining, variable rates are better. Consider fixed rates for long-term loans for stability and variable rates for short-term loans.

Yes, repaying principal first reduces interest that would accrue over the remaining loan period. Its particularly effective to repay loans with higher interest rates first.

Related Calculators

Savings Calculator

Achieve target amount through regular savings
Compound Interest Calculator

Investment return simulation

Loan Advice and Tips

Smart Loan Selection Guide
  • When comparing loan interest rates, check the banks base rate trends and added interest rate differences.
  • Tax benefits may vary depending on the loan type, so consider tax advantages as well.
  • Early repayment fees often dont apply after 3 years of the loan, so keep this in mind.
Lifecycle-Based Loan Strategy
  • Young Adults (20s): Use increasing payment to minimize initial burden, but consider additional repayments as income increases.
  • Family Formation (30s): Establish a stable plan with fixed interest rates; equal installment method is suitable.
  • Asset Growth (40s): When income is stable, equal principal payment is advantageous to reduce the total interest burden.
  • Pre-retirement (50s): Plan to repay all loans before retirement and consider aggressive additional repayments.