Formula used
The regular installment is computed with the standard amortization payment formula. The interest rate per period is i = APR / paymentsPerYear.
When i ≠ 0, the periodic payment is: PMT = P × i / (1 - (1 + i)-N), where P is principal and N is periods. When i = 0, PMT = P / N.
For deferrals, each period calculates interest = balance × i. If unpaid, interest is added to the balance (capitalized). For interest-only, the balance stays flat.
How to use
- Enter loan amount, annual rate, term, frequency, and first payment date.
- Choose a post-deferral strategy: keep the end date or keep the payment.
- Add deferral events using start period, length, and mode.
- Optionally add an extra payment to reduce principal faster.
- Press Calculate to view the summary, chart, and schedule.
- Use Download CSV or Download PDF to save results.
Example data table
A sample scenario showing inputs and what to expect.
| Scenario | Loan | APR | Term | Deferral | Strategy | Outcome focus |
|---|---|---|---|---|---|---|
| Starter budget | 25,000 | 8.50% | 5 years | Periods 7–9, no payment | Recalculate payment | Keep original payoff date |
| Cash-flow relief | 25,000 | 8.50% | 5 years | Periods 7–12, interest-only | Keep payment, extend term | Minimize payment surprises |
| Partial pay | 25,000 | 8.50% | 5 years | Periods 7–9, fixed 200 | Recalculate payment | Reduce capitalized interest |
Deferral timing and payment pressure
Deferrals shift cash flow without removing interest math. A $25,000 balance at 8.50% APR with monthly payments accrues about $177 interest in the first month. If periods 7–9 are deferred with no payment, that interest is capitalized and the balance rises each period. The schedule table shows the exact “Payment,” “Interest,” and “Balance” impact for every deferred period, so you can quantify relief versus cost.
Capitalized interest and balance growth
When interest is unpaid, it becomes principal and compounds. In full deferral mode, the calculator adds interest to the balance, increasing future interest charges. Interest-only mode keeps the balance stable because each period’s payment equals interest. Fixed-payment deferrals can reduce growth if the fixed amount covers interest; if it does not, the unpaid portion becomes capitalized. Use “Capitalized interest” in summary to track effect.
Recalculate versus extend term outcomes
Two strategies handle the post-deferral phase. “Recalculate payment to keep end date” recomputes the payment using remaining periods, often increasing the installment after deferrals. “Keep payment and extend term” maintains the regular payment but adds periods until the balance reaches zero. Compare “Actual periods” and “End” date to see differences, and use total interest to judge the long-run overall tradeoff.
Extra payments as a cost control
Extra payments target principal after interest, reducing the base that interest is computed on. Even small extras can offset deferral costs, especially if applied during deferrals. For example, applying $50 extra during a three-period deferral reduces balance immediately and can lower later interest accrual. The schedule records extras separately, letting you verify how much payoff acceleration you gained.
Reading exports and validating decisions
Use the balance chart to spot rising sections during deferral windows and confirm when amortization resumes. Download CSV for spreadsheet checks, scenario comparisons, and audit trails. Download PDF when you need a shareable schedule with consistent formatting. If your lender uses different day-count rules, treat results as planning estimates and compare against official disclosures for final decisions.
FAQs
1) What is a deferral in this calculator?
A deferral is a temporary change to payments by period. You can set no-payment (interest capitalized), interest-only, or a fixed payment for a defined range of periods.
2) Why does my balance increase during some deferrals?
In no-payment mode, interest is still calculated each period. Because nothing pays that interest, it is added to the balance, which can create a short phase of negative amortization.
3) What does “recalculate payment to keep end date” mean?
After deferrals end, the calculator recomputes a new payment using the remaining planned periods and the current balance, aiming to finish on the original schedule’s end date.
4) When should I choose “keep payment and extend term”?
Choose it when you want predictable installments after deferrals. The payment stays near the original amount, but the payoff date can move later, which often increases total interest.
5) How are extra payments applied?
Extra payments are applied to principal after interest for that period. If enabled during deferrals, the extra reduces balance even when the primary payment is paused or reduced.
6) Are the results exact for lender statements?
They are strong planning estimates using standard amortization math and simple period spacing. Lenders may use daily interest, rounding rules, or specific conventions, so confirm with official disclosures.