The loan
The currency is whatever you enter. Fixed rate, no early repayment.
Three shapes for the same debt
A fully amortizing loan charges the same amount every month — mostly interest at first, mostly principal at the end. Equal-principal repayment pays a fixed slice of principal plus interest on what remains, so the first month is the heaviest and every one after is lighter. Interest-only keeps the payments smallest of all, then demands the entire principal in one balloon at maturity.
Total interest follows how fast the principal falls
Interest accrues on the outstanding balance, so the method that shrinks it fastest — equal principal — costs the least, and interest-only, where the balance never moves, costs the most: on the same loan, almost exactly double the equal-principal figure. The amortizing loan sits in between.
The trade is first-month burden against total cost
Equal principal is cheapest but opens with the biggest payment. The amortizing loan buys a flat, plannable payment for somewhat more interest. The balloon buys the lightest months at the highest total cost, plus a repayment cliff at the end. Pick by what your cash flow can carry, not by the smallest total.
While you’re here — claim a crypto exchange bonus
More calculators
Frequently asked questions
Q. Why does equal principal cost the least?
The balance starts falling at full speed from the first month, so every later month charges interest on a smaller number. Over the term you pay interest on roughly half the principal, where the balloon loan pays it on all of it the whole time.
Q. Why is my amortizing payment mostly interest at first?
Interest is charged on the outstanding balance, which is largest at the start. The instalment is fixed, so whatever interest does not eat goes to principal — a share that grows every month as the balance falls.
Q. When does interest-only make sense?
When the principal is genuinely coming from somewhere else: a property sale, a maturing investment, a bridging situation. As a way to lower monthly payments it is the most expensive option there is, and the whole principal is still waiting at the end.