How loan interest is charged
On an installment loan the interest each month is a slice of the balance you still owe, not a slice of the original amount forever.
The monthly slice
A nominal APR divided by 12 is the monthly rate in Sumslip's loan, mortgage, and credit-card tools. A 12% APR is 1% of the remaining balance for that month. Next month the percent is the same and the balance is smaller, so the interest in currency units is smaller, provided you paid more than the interest.
If the payment is less than or equal to that month's interest, the balance does not fall. Credit cards can reach that state when the payment is too small. The credit-card page refuses the input instead of showing a payoff date that never arrives.
Level payments
A level payment is calculated so that, at a fixed rate, the same payment every month clears the balance in the term you chose. Early payments are heavy with interest. Later payments are heavy with principal. Borrowers sometimes look at the first statement and think the loan is hardly moving. The table on the loan page shows the shift year by year.
Rounding to the cent, yen, or won means the last payment can be a little different. The page pays whatever is left, plus that month's interest, so the balance ends at zero. A lender's schedule can differ by a unit or two if they round in another order.
Equal principal
Equal principal pays the same principal each month and adds that month's interest. The first payment is the large one. The last payment is the small one. Total interest is lower than on a level-payment loan of the same amount, rate, and term, because you kill principal sooner. The tradeoff is cash flow at the start.
Korean 원리금균등상환 is the level payment. 원금균등상환 is equal principal. Japanese 元利均等 is the level payment. 元金均等 is equal principal. The English labels on this site are level payment and equal principal. The loan calculator offers both. The mortgage calculator stays on level payments, because that is how a standard housing loan is usually quoted.
Fees and extra payments
An APR in a legal disclosure sometimes folds fees into an effective measure. The field on these pages is the nominal rate you type, split by 12. If a fee is added to the amount you owe, include it in the principal. If you pay it in cash at the start, it is not inside the monthly payment.
An extra monthly principal payment cuts interest. The loan page shows the interest saved against the same loan without the extra. It does not know if your contract charges a penalty for paying early. A credit-card payment is extra by nature: there is no scheduled amortizing payment until you choose one.
Related tools
These figures are estimates you can recompute from the formula on the page. They are not a lender quote, a tax bill, a payroll statement, or financial advice.