Start with three reliable inputs
You need principal, annual interest rate, and repayment term. Confirm whether the quoted rate is before or after discounts, and treat grace periods or planned early repayment as separate conditions.
Calculators commonly divide the annual rate by 12 for monthly estimates. A lender may use exact day counts and its own rounding rules, so the signed amortization schedule remains the final reference.
- Principal: the amount actually borrowed
- Annual rate: the final rate offered to you
- Term: the number of repayment months
What changes between the three methods
An equal-payment loan keeps the combined principal and interest payment broadly level. Interest makes up more of the early payments, while principal grows later.
Equal-principal repayment divides principal evenly and adds interest on the remaining balance. It starts higher but normally reduces principal and total interest faster.
Interest-only repayment pays interest during the term and principal at maturity. Monthly outflow is lower, but principal does not decline and a large maturity payment is required.
Example: 100 million won at 4% for 10 years
Under a simplified monthly calculation, the equal payment is about 1.01 million won. Equal principal starts near 1.167 million won and declines, while interest-only costs about 333,000 won per month before the 100 million won maturity payment.
The example excludes fees and grace periods. Use the lender's final schedule for contractual amounts.
- Equal payment: predictable monthly budget
- Equal principal: higher start, faster balance reduction
- Interest only: low monthly interest, large maturity principal
Costs the headline result may exclude
The method with the lowest total interest is not automatically the best fit. Consider income stability, the highest early payment you can afford, and whether you expect to repay or sell before maturity.
Early repayment charges, guarantees, taxes, changing rates, and discount-rate conditions may sit outside a basic estimate. Compare products with the same principal, term, and method, then add those costs separately.