An interest-only loan has a defining quirk: the scheduled payment covers interest and nothing else. Make every required payment for ten years and you'll owe exactly what you borrowed on day one. This interest-only loan payoff calculator is built around that reality — it shows your required interest-only payment, then lets you plan the voluntary principal payments that are the only way the balance actually falls.

Enter your balance, rate, and interest-only period, then add an extra principal amount per month (and an optional lump sum). The calculator shows your payoff timeline, total interest paid, and — for contrast — what the same period would cost if you never paid a dollar of principal. On a $100,000 balance at 7%, the interest-only payment is about $583/month; pay only that for 10 years and you'll have handed over $70,000 with zero progress. Add $500/month toward principal and the loan is gone in about 11 years total, with the interest bill falling every single month as the balance shrinks.

Interest-only structures show up in HELOCs during their draw period, some jumbo and investor mortgages, bridge loans, and certain business credit lines. If yours is a HELOC, the HELOC Calculator models the draw-to-repayment transition specifically; for standard amortizing loans, use the Loan Payoff Calculator instead.

The required payment on an interest-only loan is simply:

Because that payment fully covers each month's interest, every dollar of extra payment is pure principal — there's no split. The payoff simulation is therefore beautifully simple: your balance falls by exactly your extra principal amount each month, and your interest charge falls with it.

Worked example — $100,000 at 7%: required IO payment is $583. Adding $500/month of principal, your first-month total is $1,083, and the balance reaches zero in 200 months (16 yr 8 mo) with about $58,600 of interest paid. Double the principal to $1,000/month and payoff drops to 100 months (8 yr 4 mo) with roughly $29,500 of interest — half the time, half the interest, a perfectly linear relationship unique to interest-only structures.

The trap to plan around is the reset cliff: when the interest-only period ends, most loans recast to full amortization over the remaining term, and the required payment can jump 50% or more overnight. The CFPB's explainer on interest-only loans covers why these payment shocks caught so many borrowers off guard in the 2008 era — voluntary principal payments during the IO period are exactly how you shrink or eliminate that cliff.

• Pay "as if" it amortized. Calculate what a normal fully-amortizing payment would be for your balance, rate, and desired term (our Complete Loan Calculator does this instantly) and pay that amount. You keep the IO loan's flexibility — you can drop back to interest-only in a rough month — while amortizing on your own schedule.
• Aim lump sums early. Principal paid in year one avoids interest for the entire remaining life of the loan. The same $10,000 paid in year nine saves a fraction as much.
• Beat the reset date. Work backwards from your IO period's end: the balance remaining on that date determines your post-reset payment. Use this calculator to find the monthly principal amount that gets the balance to a level whose amortizing payment you can comfortably afford.
• Mind rate adjustments. Many interest-only products carry variable rates, so your IO payment itself can rise. HELOC rates track the prime rate, which follows the federal funds rate — when the Fed moves, your payment moves within a cycle or two.