Personal Loan Payment Interest-Only Estimator
This estimator calculates the interest-only payment for a personal loan given the loan principal, annual interest rate (APR), number of payments per year, and the length of the interest-only period. It shows the periodic payment, annual interest cost, and total interest paid during the interest-only period.
Use this tool to compare quick estimates before requesting firm loan terms from a lender. This tool provides indicative values only and does not replace loan disclosures, underwriting, or legally required pricing documents.
Inputs
Results
Periodic interest-only payment
$58.33
Annual interest-only payment
$700.00
Total interest paid during interest-only period
$700.00
Interest rate per payment period
0.58%
| Output | Value | Unit |
|---|---|---|
| Periodic interest-only payment | $58.33 | currency |
| Annual interest-only payment | $700.00 | currency |
| Total interest paid during interest-only period | $700.00 | currency |
| Interest rate per payment period | 0.58% | % |
Visualization
Methodology
The calculator applies straightforward interest-only math: interest accrues on the outstanding principal and only interest is paid during the interest-only period. No principal is amortized in that phase.
For transparency and traceability, the calculation and numeric behavior are designed with software quality and numerical precision guidance in mind. Refer to NIST guidance for secure and auditable computation practices, ISO standards for software lifecycle and quality control, and IEEE best practices for numerical computing and rounding behavior.
Accuracy caveat: results are rounded for display and assume interest is computed on a simple nominal APR basis with the specified payment frequency. Actual lender calculations can use different day count conventions, compounding rules, or fees which alter payments and totals. Always confirm with the lender's loan agreement.
Worked examples
Example 1: $10,000 principal, 6% APR, 12 payments/year, 1-year IO period → periodic = $50.00, annual = $600.00, total IO = $600.00.
Example 2: $25,000 principal, 8% APR, 12 payments/year, 2-year IO period → periodic = $166.67, annual = $2,000.00, total IO = $4,000.00.
Further resources
External guidance
Expert Q&A
Is the interest-only payment the same as the minimum payment a lender may require?
Not necessarily. This calculator shows the pure interest amount based on the inputs. Lenders may require additional fees, escrow, or minimum principal repayments that increase the periodic payment.
Does this calculator show what happens after the interest-only period ends?
No. This estimator only computes interest-only payments and totals for the interest-only phase. To model post-interest-only amortization, run a separate amortizing payment calculation using the remaining term and any principal balance.
How accurate are the numbers?
Displayed values are accurate to common monetary rounding rules but do not include lender fees, different compounding conventions, or day-count rules. For contractual terms, rely on lender disclosures and underwriting. This tool follows software quality guidance but is not a substitute for regulated loan documents.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- Institute of Electrical and Electronics Engineers (IEEE) — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov
- Consumer Financial Protection Bureau (general consumer guidance) — https://www.consumerfinance.gov