Deferred Payment Loan Calculator With Amortization Schedule

Deferred Loan Formulas:

\[ \text{New PV} = PV \times (1 + r)^d \] \[ PMT = \frac{\text{New PV} \times r}{1 - (1 + r)^{-n}} \]

Initial Principal (PV):

USD

Annual Interest Rate:

Deferment Period:

months

Repayment Term:

months

Adjusted Principal After Deferment:

Monthly Payment (PMT):

Total Interest:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is a Deferred Payment Loan?

A deferred payment loan allows borrowers to postpone payments for a specified period (deferment). During deferment, interest typically continues to accrue, increasing the loan balance. Payments begin after the deferment period ends.

2. How the Calculator Works

The calculator uses these formulas:

\[ \text{New PV} = PV \times (1 + r)^d \] \[ PMT = \frac{\text{New PV} \times r}{1 - (1 + r)^{-n}} \]

Where:

\( PV \) — Initial loan amount (USD)
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( d \) — Deferment period (months)
\( n \) — Repayment term (months)
\( PMT \) — Monthly payment amount (USD)

Explanation: The first formula calculates the new loan balance after deferment, and the second calculates the monthly payment based on this adjusted balance.

3. Understanding the Amortization Schedule

Details: The amortization schedule shows how each payment is split between principal and interest, and how the loan balance decreases over time.

4. Using the Calculator

Tips: Enter the initial loan amount, annual interest rate, deferment period in months, and repayment term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What happens during the deferment period?
A: Interest typically continues to accrue during deferment, increasing the loan balance. No payments are required during this time.

Q2: How does deferment affect total loan cost?
A: Deferment increases total interest paid because interest compounds on the growing balance during deferment.

Q3: Are all loans eligible for deferment?
A: No, deferment terms vary by lender and loan type. Some loans may have restrictions or require qualification.

Q4: What's the difference between deferment and forbearance?
A: Deferment is typically structured in advance, while forbearance is often granted temporarily for financial hardship.

Q5: Can I make payments during deferment?
A: Some loans allow voluntary payments during deferment which can reduce the interest that capitalizes.