How interest-only loan calculator works
An interest-only loan lets you pay only the interest for an initial period, so your monthly payment is lower but your principal never goes down. After that period ends, the loan converts to a standard amortizing loan and you pay both principal and interest, usually at a higher payment to pay the balance off within the remaining term.
Enter the loan amount, the interest rate, the length of the interest-only period (in years), and the length of the amortization period that follows. The calculator computes the interest-only monthly payment (principal times the monthly rate), the total interest paid during that period, then the amortizing monthly payment and its total interest using the standard amortization formula.
The totals combine both periods so you can see the grand total of interest and the payoff date if you provide a start date. This is distinct from a regular loan or mortgage calculator, which assumes you pay principal from day one. It is a planning estimate for education only, not financial advice.