Interest-Only Loan Calculator

Amortization (interest-only)

Interest is computed on actual days since last payment using the selected day count basis. If you prepay principal, the next interest payment drops automatically.

About this Interest-Only Loan Calculator

Interest-only loans are simple on the surface and tricky in the details. For a period of time you pay just the interest that accrues, not principal. Your monthly cash flow looks lighter, but the original balance usually remains and a balloon is due at maturity. This calculator models that setup in a way that lenders and spreadsheets do: daily accrual with a 365 or 360 day basis, real dates, and flexible payment frequency. You can pick monthly, biweekly, or weekly payments, set the start date, and layer in principal prepayments—either at every payment or as a one-time lump sum. We then show your first interest-only payment, total interest over the term, and the balloon due at the end, alongside a line-by-line schedule you can export as CSV.

How to use

1. Enter the basics. Add the loan amount and annual interest rate. Set the term in years or months.
2. Choose payment timing. Select monthly, biweekly, or weekly. Pick the day-count basis: Actual/365 is common for consumer loans; Actual/360 is common in some commercial notes and lines.
3. Set dates. Pick the start date (the day interest starts). If you leave the first payment blank, we choose the next logical date based on the frequency.
4. Optional prepayments. Add a fixed extra principal amount applied every payment, a one-time extra on the first payment, or both. We cap extra principal at the current balance so you never overpay.
5. Calculate. The Summary panel shows your first interest-only payment, total interest, remaining balance at maturity (the balloon), and the number of payments generated. The amortization table shows each row’s date, days in period, interest, extra principal, payment, and end balance.
6. Export. Use CSV to take the schedule to Excel or share with a borrower, partner, or underwriter.

Result interpretation

The first interest-only payment equals principal × annual rate × (days in first period ÷ basis). Because we use actual days between the start date and first payment, starting on the 1st vs. the 15th will change the first bill. After that, each period’s interest is computed on the then-current balance and the exact day count to the next payment date.

Balloon due at maturity is simply whatever principal remains on the maturity date. In a pure interest-only loan with no prepayments, the balloon equals the original amount. If you add extra principal along the way, the balloon shrinks. You can use this to test cash-flow strategies: for example, add $200 each month and watch how much interest you save and how the balloon drops.

The day count basis matters. On Actual/360, the denominator is 360, so the daily rate is higher and total interest will be slightly larger than Actual/365 for the same nominal APR. On long terms or high balances, that difference adds up. The schedule exposes that math line by line.

FAQ

Why does biweekly sometimes show a different total interest than “twice-a-month”? Because we use actual 14-day gaps, the number of periods and exact day counts across a year differ from two payments on fixed calendar dates. That can swing total interest a bit.

How do one-time prepayments work? The one-time extra is added to the first payment. If you need it on a later date, set that as your “first payment date,” run the calc, then switch back after exporting.

Is this an amortizing loan? No. This is interest-only. The scheduled payment covers interest for the period. Principal only falls when you add extra.

What if I need a fully amortizing schedule? Use the Loan Calculator or the home-focused Mortgage Calculator. To see affordability against income, try the Debt-to-Income Calculator.

Does the calculator include fees or escrow? No. It focuses on interest accrual and principal behavior. Add fees outside the model if you need APR analysis.

Reminder: every lender has policy quirks. Treat this as planning math, not a legal disclosure.