📅 2025-01-09
Interest and repayment amounts you must check before taking a loan! Use a loan calculator to know exact amounts and make smart loan plans.
Loan interest is calculated in two main ways. ① Equal installment: Pay same amount (principal+interest) monthly. Interest proportion is high initially, principal proportion increases later. ② Equal principal: Pay same principal monthly, interest decreases with balance. Higher initial burden but lower total interest.
Monthly payment = Loan amount × [Monthly rate × (1+Monthly rate)^Months / {(1+Monthly rate)^Months - 1}]. Example: 100M KRW, 4% annual, 20 years (240 months). Monthly rate = 0.04/12 = 0.00333. Monthly payment = 100,000,000 × [0.00333 × 1.00333^240 / (1.00333^240 - 1)] ≈ 606,000 KRW. Total repayment ≈ 145.44M KRW (interest 45.44M KRW).
Monthly principal = Loan amount / Months. Monthly interest = Remaining principal × Monthly rate. Example: 100M KRW, 4% annual, 20 years. Monthly principal = 100,000,000 / 240 ≈ 416,667 KRW. 1st interest = 100,000,000 × 0.00333 ≈ 333,333 KRW. 1st payment = 750,000 KRW. Interest decreases monthly, last payment about 418,000 KRW. Total interest ≈ 40.08M KRW.
Equal installment: ① Easier budgeting with consistent monthly amount. ② Lower initial cash flow burden. ③ Suitable for long-term loans. Equal principal: ① Lower total interest burden. ② Higher initial payment requires reserve funds. ③ Beneficial for early repayment plans or stable income.
① Compare rates: Compare multiple institutions for lowest rate. ② Manage credit score: Higher score gets preferential rates. ③ Early repayment: Partial prepayment reduces interest. ④ Refinancing: Switch to lower rate loan. ⑤ Variable vs fixed rate: Choose based on rate outlook. ⑥ Utilize government-supported loans.
① Total loan limit: DTI (Debt-to-Income) 40% or less recommended. ② Check DSR (Debt Service Ratio). ③ Prepayment penalty terms. ④ Grace period utilization. ⑤ Additional costs (handling fees, stamp duty). ⑥ Rate change scenario simulations. ⑦ Accurate repayment ability assessment.
Loans must be planned carefully. Use loan calculators to create accurate repayment plans, accurately assess your repayment ability, then execute the loan. Excessive loans can harm financial health.