How Interest Works — Gavin Hamilton

Educational Tool

How Interest Works

Enter a loan amount, rate, and monthly payment to see exactly what goes to interest vs. principal — and when the loan ends.

Inputs

Loan Amount

Annual Interest Rate (%)

Desired Monthly Payment

Key Takeaways

Interest-only payment—
Your payment—
Paid off in—

Your Results

Interest Analysis

⚠ Interest-Only Payment

Interest Only / Month

—

balance stays at — forever

At this payment, you cover only the interest. The loan balance never decreases — every dollar goes straight to the lender. You are renting the money indefinitely.

✓ Your Payment — — / Month

Paid Off In

—

Total Paid

—

Total Interest Paid

—

Your payment covers interest and chips away at the balance. As the balance drops each month, so does the interest charge — meaning more of each payment attacks the principal.

Amortization — Watch Interest Shrink as Balance Falls

Mo	Payment	Principal	Interest	Balance

For educational and informational purposes only. Not a commitment to lend.