ToolwebRead loan and savings schedules: principal, interest and payment timing
A small first payment does not necessarily mean a low total interest cost. The same annual rate also produces different interest on a lump-sum deposit and monthly installments. Reading when money enters or leaves, and how much principal remains, gives the figures a common frame of reference.
1. Hold loan assumptions constant before comparing methods
Fix principal, annual fixed rate, total months and grace months first. Then read both the first payment and total interest in the comparison table. Changing the amount or term at the same time mixes method differences with changes to the loan assumptions.
| Repayment method | Payment structure | Inspect especially |
|---|---|---|
| Annuity | Approximately level principal-and-interest payments after grace | Changing principal/interest composition |
| Equal principal | Similar principal installments plus interest on the remaining balance | Initial payment and its subsequent decline |
| Bullet | Interest only, with principal due at maturity | Large final principal payment and total interest |
2. Reconcile principal repaid and the final balance
Each schedule payment combines principal and interest. Remaining principal becomes the next month’s interest base. Across the full schedule, principal payments should add up to the initial principal and the final balance should be zero. This tool settles whole-KRW monthly rounding differences in the last installment.
A KRW 12 million loan at 0% over twelve annuity months pays KRW 1 million each month and zero total interest. The example with KRW 100 million, 4%, 120 months and no grace begins at approximately KRW 1,012,451: KRW 333,333 interest and KRW 679,118 principal. Actual day-count conventions can change contractual monthly amounts.
3. Grace months are part of the total term
A 12-month grace period inside a 120-month term leaves 108 principal-repayment months. It does not automatically extend the loan to 132 months. Inspect the transition from interest-only payments to the first principal repayment.
Interest uses an annual rate divided by twelve. Actual days between due dates, variable rates, early-repayment fees and guarantee charges belong to the contract separately. The balance plot helps explain the repayment shape; it does not replace the contractual schedule.
4. Separate the timing of deposits and installments
A lump sum earns over the whole term. With beginning-of-month installments, each contribution has a different remaining investment period. For a twelve-month plan, the first contribution earns twelve months of interest and the last earns one under this model.
| Input convention | When principal arrives | What to check in the schedule |
|---|---|---|
| One initial deposit | Once at the beginning | Principal stays fixed while interest grows |
| Beginning-of-month installments | Equal new contribution before each month’s calculation | Growing principal and different earning periods |
| Simple interest | Interest calculated on contributed principal only | Past interest does not join next month’s principal base |
| Monthly compounding | Pretax interest reinvested for the next month | Past interest also earns later interest |
5. Read the tax rate and timing behind maturity value
The example of KRW 10 million at 3.5% simple interest for twelve months, with 15.4% withheld at maturity, produces KRW 350,000 pretax interest, KRW 53,900 withholding and KRW 10,296,100 after-tax maturity. The illustrative 15.4% combines ordinary 14% interest-income tax with local tax equal to 10% of that tax. Enter the actual combined rate for exempt or preferential treatment.
The compound model reinvests pretax interest and taxes it once at the end. A product using monthly withholding, exact-day accrual, another compounding period, conditional bonus rates or early-withdrawal rules cannot be compared using the headline annual rate alone. Comprehensive financial-income tax settlement is not included in this schedule.
6. Recheck the scope when comparing repayment burden with DSR
Enter all annual principal and interest for mortgage and other borrowing in the DSR tool. KRW 15 million of annual payments against KRW 50 million of income produces an entered-amount ratio of 30%. KRW 5 million of annual headroom against a 40% target does not mean KRW 5 million of new loan principal is available.
Lenders’ stress DSR may apply additional rates and product-specific term conversions. Do not reinterpret this arithmetic ratio as current regulatory compliance or approval. Save the full CSV to reconcile installments, then compare the assumptions with the institution’s explanation and contractual repayment schedule.