Loan Interest Calculator
Principal and interest repayment amounts.
Monthly payment
477,415원
A reference estimate. Prepayment fees and grace periods are not reflected.
Scenario A e.g. current loan
Scenario B e.g. new loan to switch to
Scenario A
Scenario B
Estimates only. Prepayment fees and grace periods are not reflected for either scenario.
Loan repayment methods
Loans are typically repaid in one of three ways. Equal payment (equal installment) keeps the total monthly payment (principal + interest) constant for the whole term. Equal principal keeps the monthly principal portion constant while interest shrinks as the balance decreases, so payments start high and decline over time. Bullet (interest-only) repayment pays only interest each month and the full principal at maturity, minimizing monthly burden but maximizing total interest.
How it's calculated
With monthly rate r (annual rate ÷ 12 ÷ 100) and n months: equal payment = principal × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1); equal principal splits principal evenly and charges interest on the declining balance; bullet charges interest only until the principal is repaid in full at maturity.
Comparison by method
Even with the same loan terms, total interest and the initial burden differ a lot by repayment method.
| Method | Total interest | Initial burden | Feature |
|---|---|---|---|
| Equal payment | Medium | Medium (same every month) | Easy to budget |
| Equal principal | Lowest | Highest (first month) | Saves the most total interest |
| Bullet | Highest | Lowest (interest only) | Minimal monthly burden, principal due at maturity |
Worked examples (100,000,000 KRW loan, equal payment)
Example 1. 100,000,000 KRW loan, 4% annual rate, 30 years (360 months), equal payment.
- Monthly rate r = 4 ÷ 12 ÷ 100 = 0.003333
- Monthly payment = principal × r × (1+r)³⁶⁰ ÷ ((1+r)³⁶⁰ − 1) = 477,415 KRW
- Total payment 171,869,400 − principal 100,000,000 = total interest 71,869,400 KRW
Example 2. Same 100,000,000 KRW loan at 4%, shortened to 10 years (120 months).
- Monthly payment = 1,012,451 KRW (about 2.1× the 30-year payment)
- Total payment 121,494,120 − principal = total interest 21,494,120 KRW (about 3.3× less than the 30-year total)
At the same rate, a shorter term raises the monthly payment but sharply cuts total interest.
Monthly payment by rate and term (100,000,000 KRW loan)
Monthly payment on a 100,000,000 KRW loan under equal-payment repayment, by annual rate and term.
| Annual rate | 10 years | 20 years | 30 years |
|---|---|---|---|
| 3% | 965,607 | 554,598 | 421,604 |
| 4% | 1,012,451 | 605,980 | 477,415 |
| 5% | 1,060,655 | 659,956 | 536,822 |
| 6% | 1,110,205 | 716,431 | 599,551 |
How rate type and grace periods change total interest
The same rate over the same term can still produce different totals, depending on whether there is a grace period and whether the rate is fixed or variable.
A grace period increases interest
A grace period means paying interest only. Early payments fall, but the principal does not, so that interest is added on top — and once the grace ends, the principal must be repaid over a shorter remaining term, raising instalments sharply.
On a 30-year loan with three years' grace, principal is actually repaid over 27 years, and the total interest exceeds a straight 30-year repayment.
Unless income is temporarily low but certain to rise, repaying principal from the outset costs less overall.
Fixed and variable rates
Variable rates are typically an index such as COFIX plus a margin, reset every six or twelve months. Falls reduce the payment, rises increase it — and a long mortgage stays exposed throughout.
Fixed rates hold for the term but usually start higher. Fixed suits an expectation of rising rates and variable the opposite, though neither is easy to predict.
Mixed products fix for the first few years then float, while periodic products refix at intervals — a middle path between early cost and rate risk.
What to compare when weighing total cost
Headline rates understate the burden: stamp duty, mortgage registration and valuation fees all add up, and any prepayment fee belongs in the comparison if refinancing is likely.
Preferential rate conditions matter too — salary transfers, card usage or direct debits are common requirements, and the rate rises if they lapse.
Repayment structure also shifts the total: equal-principal repayments cost more early but less overall, while equal-instalment repayments are easier to plan around.
Legal basis
- Duty to explain loan products — Financial Consumer Protection Act art. 19
- Right to request a rate reduction — Banking Act art. 30-2
- COFIX publication — Korea Federation of Banks