Deferred Payment Loan Calculator
From principal, rate, term and a deferral (grace) period, compute the new balance after interest capitalisation and the post-deferral monthly payment.
Input Data
Results
At a glance:Deferred (grace) loan: during deferral, interest still accrues and is usually capitalised (added to principal). Accrued = principal x rate x deferral months/12; new balance = principal + accrued; post-deferral monthly = amortised instalment on new balance over remaining term. Example: 100k at 6%, 10y, defer 12mo → accrued ≈6k, new balance ≈106k, payment ≈1,251 (from ≈1,110), total interest ≈50,165 (from ≈33,225). Deferring postpones and compounds interest. WARNING: Assumes capitalisation; some lenders allow interest-only to avoid it; real terms (daily accrual, fees) vary. Education, not advice.
Formula
Monthly rate r = annual rate / 12.
New balance = principal × (1+r)^defer months (interest capitalised).
Accrued interest = new balance − principal.
Post-deferral payment = amortised instalment on new balance over remaining term.
$$r = \\dfrac{\\text{Annual rate}\\%}{12}$$How to Use
- Enter the principal, annual rate and term.
- Enter the deferral (grace) months.
- View accrued interest, new balance, post-deferral payment and total interest.
FAQ
What is a deferred payment loan?
A loan where you postpone payments for a set grace period (student loans, renovation loans, payment holidays). Crucially, interest usually still accrues and is added to the principal (capitalised), so the balance grows even though you pay nothing.
What is interest capitalisation?
Capitalisation means accrued interest is added to the principal; future interest is then charged on that larger balance — interest on interest. It is why deferring raises both the later payment and total cost.
How much extra does deferring cost?
In the example, deferring 24 months on a 100k/6%/10y loan raises the balance from 100k to ~112.7k, the payment from ~1,110 to ~1,251, and total interest from ~33.2k to ~50.2k — about HK$17k more. The longer the deferral, the larger the penalty. Deferral is emergency relief, not a saving.
Can I avoid capitalisation during deferral?
Sometimes. Some lenders let you pay interest only during the grace period, keeping principal intact (no capitalisation). If cash flow allows, paying at least the interest during deferral is the cheapest option. Always check the lender's exact terms.
Why does my result differ from the lender?
This model uses monthly accrual and capitalisation with a fixed rate. Real loans may use daily accrual, flat rate vs APR, plus arrangement/fees and early-repayment charges. Treat it as an estimate; the lender's schedule is final. For Hong Kong mortgages and instalment loans, confirm the bank's deferral/clarity terms with the HKMA-regulated lender.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.