Loan Interest Payment Calculator for Calculating Loan Interest-Only Payments

Loan Interest Payment Calculator Sign

This calculator will calculate the interest-only payment due for the current period, based on the current principal owed, the annual interest rate, and the loan's payment frequency.

Plus, the calculated results also include a chart showing what would happen to your loan balance if you did not make any payments at all for the next year.

Read more ...

Also on this page:

Loan Interest Payment Calculator

Calculate interest-only loan payment on the principal balance owed for the current period.

Special Instructions

Learn More

Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Balance:Principal balance:Current principal balance owed:Current principal balance owed:

Current principal balance owed:

Enter the current balance owed on the loan (loan payoff). Enter as a dollar amount but without the dollar sign and any commas. If you don't see this amount listed on your current statement, call your lender and ask for the current payoff amount.

Rate %:Interest rate %:Interest rate percentage:Interest rate percentage:

Interest rate percentage:

Enter the loan's stated annual interest rate expressed as a percentage, but without the percent sign (for 6.5%, enter 6.5).

Pmt freq:Payment frequency:Loan's stated payment frequency:Loan's stated payment frequency:

Loan's stated payment frequency:

Select the loan's stated payment frequency from the drop down menu.

IO payment:Interest only pmt:Interest only payment amount:Interest only payment amount:

Interest only payment amount:

This is the amount of the interest you are being charged on the balance owed for the current period.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools


What interest-only is, and why paying just the interest is better than making no payment at all.

What is an Interest Only Loan?

An interest-only loan is where you as the borrower simply pay the accruing finance charges on the money borrowed, which means that the amount you owe never decreases. At the end of the loan's stated term, you will need to either convert the balance owed to a conventional loan or pay the loan off with cash or other liquid assets.

To calculate interest on a loan balance, you divide the decimal form of the annual percentage rate by the number of payment periods per year and then multiply that result by the current balance owed.

For example, if your current balance was $10,000 on a 12%, monthly payment loan, the current finance charge would be $100.00 (.12 ÷ 12 x 10,000). If you fail to make the $100 interest payment, then that amount may be added to your loan balance -- in which case you would end up paying finance charges on finance charges.

Benefit of Interest Only Loan

The benefit of an interest-only loan is that you get to collect a lot more finance charges from the borrower without having to do any extra paperwork.

Oh, did you mean what is the benefit to the borrower? I can't think of any benefit to the borrower, so I assumed you were referring to the benefit to the lender. Sorry.

Better to Make Interest Payment than No Payment

As a borrower, if you can't make a full principal and interest payment (PIP), the last thing you want to do is let the finance charges pile onto the loan balance. That is unless your purpose is to help your lender's CEO to expand his swimming pool to Olympic size.

If that's not your intention, then you will probably want to limit your interest-only loan payments to times when there is simply no other less costly alternative.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.