Interest-Only Loan Calculator

Finance Updated 16 Jun 2026

Interest-Only Loan Calculator is a financial calculator that helps you calculate loan or mortgage payment amounts and total repayment cost. The formula used is: Monthly IO = P × r\nAmortizing EMI = P × r × (1+r)^n / ((1+r)^n − 1) [n = remaining months]\nTotal Cost = IO Payments + Amortizing Payments. Enter monetary values in your local currency. Enter interest rates as plain numbers (e.g. enter 5 for 5 %).

Formula

Monthly IO = P × r Amortizing EMI = P × r × (1+r)^n / ((1+r)^n − 1) [n = remaining months] Total Cost = IO Payments + Amortizing Payments

Example Calculation

Inputs

Loan Amount (PKR): 2000000 PKR
Annual Interest Rate: 20 %
Interest-Only Period: 5 years
Total Loan Term: 20 years

Suppose you enter: Loan Amount (PKR) = 2000000, Annual Interest Rate = 20, Interest-Only Period = 5, Total Loan Term = 20. The calculator applies the formula (Monthly IO = P × r\nAmortizing EMI = P × r × (1+r)^n / ((1+r)^n − 1) [n = remaining months]\nTotal Cost = IO Payments + Amortizing Payments) and shows all output values below. Change any input field to immediately see how the result changes.

Frequently asked questions

What is the Interest-Only Loan?

The Interest-Only Loan Calculator is a financial calculator that helps you calculate loan or mortgage payment amounts and total repayment cost. Enter monetary values in your local currency. Enter interest rates as plain numbers (e.g. enter 5 for 5 %).

When should I use this calculator?

Use this calculator whenever you need a quick, accurate result for loan or mortgage payment amounts and total repayment cost without working through the arithmetic manually.

What units should I enter?

Enter monetary values in your local currency. Enter interest rates as plain numbers (e.g. enter 5 for 5 %).

How accurate are the results?

Assumes constant rates, no additional fees, and no tax unless stated. Actual outcomes vary with market conditions.

How do I interpret the result?

Compare against your financial goals or market benchmarks. A higher figure may mean greater cost or greater return depending on context.

How can I verify the calculation manually?

Use the displayed formula and work through the numbers step by step. If your manual result differs slightly, check rounding and unit conversions first.

Can I use this for planning and budgeting?

Yes. Run best-case, expected, and worst-case inputs to compare outcomes and make safer planning decisions.