Interest-only loan calculator.
See the interest payment each period and the balloon due at maturity. The balance does not fall until the end, so the final payment is the whole principal.
- Installments
- 24
- First payment
- 13 Nov 2026
- Maturity
- 13 Oct 2028
Schedule
| # | Due | Payment | Interest | Principal | Balance | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | 13 Nov 2026 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 2 | 13 Dec 2026 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 3 | 13 Jan 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 4 | 13 Feb 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 5 | 13 Mar 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 6 | 13 Apr 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 7 | 13 May 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 8 | 13 Jun 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 9 | 13 Jul 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 10 | 13 Aug 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 11 | 13 Sept 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| 12 | 13 Oct 2027 | 500.00 | 500.00 | 0.00 | 100,000.00 | ||||||||||||
| |||||||||||||||||
| Total | 112,000.00 | 12,000.00 | 100,000.00 | ||||||||||||||
The note, the schedule above and a shared ledger, free for up to two open loans. How it works
What an interest-only loan is
Small payments, then one large one.
On an interest-only loan the borrower pays, each period, exactly the interest that accrued on the principal. Nothing is applied to the balance, so the payment is the same every period and the principal is due in full on the maturity date. That final payment is called a balloon.
The structure suits a bridge: a borrower who will receive a lump sum before maturity, and a lender who is content to be repaid then. It is a poor fit for a borrower who has no plan for the balloon. Total interest is higher than on an amortizing loan of the same rate and term, because the full principal is outstanding the whole time.
Compare structures side by side in the loan calculator, or read interest-only, amortizing, or fixed principal.
Questions
- How is an interest-only payment calculated?
- Each payment is the principal multiplied by the annual rate divided by the number of payments per year. On $100,000 at 6% paid monthly, that is $500.00 every month. The principal does not change until maturity.
- What is the balloon payment?
- The final payment, which is the whole principal plus the last period’s interest. On $100,000 at 6% monthly it is $100,500.00.
- Can the borrower pay principal early on an interest-only loan?
- If the note allows prepayment, yes. Any amount beyond the interest due reduces principal, and every later interest payment falls accordingly.
- When does an interest-only loan make sense?
- When the borrower expects a lump sum before maturity, such as a sale, a refinance or a bonus, and wants low payments until then. The lender should be comfortable that the lump sum is real, and both should plan for the balloon from the start.