
Interest Only Calculator This interest only loan calculator figures your loan's monthly interestonly payment. Admittedly, it is very simple, but that is because interest only loans are very simple. If you are looking for something more complex then please check out our full suite of loan calculators here. If this free calculator helps you then please give a like, tweet, or +1 to support our effort. Thanks for helping out! Click here for information and term definitions
What Is Your Loan’s Monthly InterestOnly Payment?Are you considering an interestonly loan? It helps to know what your payment will be before you sign on the dotted line. This Interest Only Loan Calculator figures your payment easily using just two simple variables: the loan principal owed and the annual interest rate. Click “Calculate Interest Only Payment” and your monthly interest payment will display. Interestonly loans are simple. Read on to better understand how these loans work and how they might affect your finances. What Is An InterestOnly Loan?Interestonly loans are loans where the borrower pays only the monthly interest for a set term while the principal balance remains unchanged. There is no amortization of principal during the loan period. At the conclusion of the interestonly term, borrowers usually have the option to convert to a conventional loan, or pay the balloon (principal owed). Payments for conventional loans amortize principal by including both principal and interest in every payment. The principal is the face amount of money owed, while interest is the time cost of borrowing. The monthly payments on interestonly loans are relatively low since you will not be paying any principal during the loan term. However, after the interestonly loan term expires, which is usually 510 years, you normally have to start paying the principal and interest. This means you should expect higher monthly payments after the interestonly period. Are InterestOnly Loans Right For You?For most people, the interestonly loan is a good option if you do not intend to keep your property for a long period of time. This is also a good option if you are a savvy investor because it can free up available cash to be invested for a potentially higher return. However, if the extra money is used for basic needs such as food, children’s education, or paying debts then this might not be a good option for a borrower; unless, of course, the borrower is expecting to receive a big amount of money at the end of the interestonly period. This Interest Only Loan Calculator makes the math easy by figuring the monthly payments for you. If the monthly payment doesn’t fit your budget, it’s a good idea to look for other financing or funding options. What Are The Risks Involved With InterestOnly Loans?You should also be aware that there are risks associated with interestonly loans. For example, interestonly mortgage loans are very risky if the market price of the property falls during the loan period and you want to sell the property. If the sale price of the property is less than the face amount of your mortgage loan you will be “upsidedown” – meaning you owe more than your property is worth. This is known as negative equity. Additionally, the interest rate of an interestonly loan is usually higher than a conventional mortgage loan because lenders consider interestonly loans to be riskier. It is also possible for the interest rate to vary based on fluctuating market conditions if your particular loan is set up as an adjustablerate loan. Thus, if the interest rate goes up, your monthly payment also goes up. If you don’t have enough extra cash to cover the additional amount due to the increased interest rate then you will be at risk of failing to make the monthly payments. If you fail to pay your monthly payments over a period of successive months than you could face foreclosure. When Are InterestOnly Loans Beneficial?However, interestonly loans can be very beneficial if used in the right situation. They can offer more value for your money than any other refinancing option if used for a brief period of time. However, if this is the only way you can afford to purchase a home then consider reassessing your needs to find a more affordable options. The key is to not be overly lured in by the appeal of a lower monthly payment. Be sure to seek professional advice before signing up for an interest only loan. Be smart, think through your options, and make the best financial decision for you and your family. Interest Only Loan Calculator Terms & Definitions
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Interest Only Loan Calculator

Interest Only Calculator This interest only loan calculator figures your loan's monthly interestonly payment. Admittedly, it is very simple, but that is because interest only loans are very simple. If you are looking for something more complex then please check out our full suite of loan calculators here. If this free calculator helps you then please give a like, tweet, or +1 to support our effort. Thanks for helping out!

