A grace period on a Korean loan means you pay interest only for the first months or years and start repaying principal later. It eases the first years, but because the balance doesn’t fall, interest runs on the whole loan. On ₩300 million at 4.32% a year, the grace-period payment is ₩1,080,000 a month (₩1.08 million). Over the same 30 years, a 1-year grace then 29 years of equal instalments costs ₩239,602,618 in interest, which is ₩3,872,368 (about ₩3.87 million) more than 30 years with no grace (₩235,730,250). The calculator below takes the grace period, repayment period and method. This is our arithmetic, not a formula set in law.
1. In the grace period you pay principal × annual rate ÷ 12 — ₩1.08 million on ₩300 million at 4.32% (ours).
2. With the total term fixed, a longer grace means higher payments later — ₩1,513,341 a month after a 1-year grace.
3. Interest rises by about ₩3.87 million for 1 year of grace and about ₩11.86 million for 3 — equal instalment, same 30 years.
Calculator
Updates as you type. Monthly interest = balance × annual rate ÷ 12 (our arithmetic, same as our loan calculator). Banks may charge interest by the day, add fees, or change a floating rate; check your loan agreement.
The formulas — our arithmetic
| Item | Formula | Worth noting (ours) |
|---|---|---|
| Grace period, monthly | Principal × r (r = annual rate ÷ 12 ÷ 100) | Same every month, since the balance doesn’t fall |
| Grace period, total | Monthly interest × grace months | ₩300M at 4.32% for 1 year: ₩1,080,000 × 12 = ₩12,960,000 |
| After grace (equal instalment) | M = P × r × (1+r)n ÷ ((1+r)n − 1), n = repayment months | P is still the full amount borrowed |
| After grace (equal principal) | P ÷ n of principal + last balance × r | Largest in the first month, falling after |
| Extra interest from grace | (grace interest + repayment interest) − total interest with no grace over the same total term | Last row of the calculator |
The equal-instalment and equal-principal formulas are the same as in our loan repayment calculator, which notes that it ignores grace periods; this calculator fills that gap. With no principal repaid during the grace period, the balance when repayment starts is the amount first borrowed, spread over the remaining months. Amounts are rounded to the nearest won.
Three worked cases — ₩300M, 4.32%, equal instalment
| Case (our example) | Monthly | Total interest · vs no grace |
|---|---|---|
| No grace, 30 years | ₩1,488,140 throughout | ₩235,730,250 · baseline |
| 1-year grace + 29 years | ₩1,080,000 during grace → then ₩1,513,341 | ₩239,602,618 · +₩3,872,368 |
| 3-year grace + 27 years | ₩1,080,000 during grace → then ₩1,570,085 | ₩247,587,698 · +₩11,857,448 |
| 1-year grace + 30 years (31 in all) | ₩1,080,000 during grace → then ₩1,488,140 | ₩248,690,250 · +₩12,960,000 |
The first three rows keep the total term at 30 years with the grace inside it. The repayment period gets shorter, so the monthly payment after grace rises from ₩1,488,140 to ₩1,513,341 and ₩1,570,085. If the year of grace is added on top of 30 years, as in the last row, the later payment is unchanged but the ₩12,960,000 of grace interest is simply added. Which one your contract means changes the numbers, so the calculator takes grace and repayment periods separately (our note).
With equal principal — same terms
| Case (our example) | Monthly | Total interest · vs no grace |
|---|---|---|
| No grace, 30 years | First ₩1,913,333 → last ₩836,333 | ₩194,940,000 · baseline |
| 1-year grace + 29 years | ₩1,080,000 during grace → first ₩1,942,069 → last ₩865,172 | ₩201,420,000 · +₩6,480,000 |
| 3-year grace + 27 years | ₩1,080,000 during grace → first ₩2,005,926 → last ₩929,259 | ₩214,380,000 · +₩19,440,000 |
Equal principal repays the same slice of principal each month, so interest falls faster and the total is lower than equal instalment. With no grace over 30 years the gap is ₩40,790,250; with a 1-year grace and 29 years it narrows to ₩239,602,618 − ₩201,420,000 = ₩38,182,618, because during the grace period both methods charge the same interest only (our arithmetic).
When to look at grace — our summary
| If | What to do | Worth noting (ours) |
|---|---|---|
| You can’t repay yet (before moving in, during building) | Pay principal × r monthly for the grace months | Payments jump in the month grace ends |
| You want to know if the later payment is affordable | Compare “each month once repayment starts” with your income | Lending limits: our DSR calculator |
| Short or long grace? | Try 0, 1 and 3 years and compare the extra interest | On ₩300M at 4.32%, millions of won per year |
| A lump sum arrives during grace | Paying some off first cuts the grace interest | Check prepayment fees in the contract first |
Checklist
- ☐ Is the grace period inside or on top of the total term?
- ☐ Grace-period interest = principal × annual rate ÷ 12
- ☐ Payment in the month grace ends, against your income
- ☐ With a floating rate, grace interest changes too
- ☐ Fees for extending grace or repaying early
Questions that remain
Why is grace interest ₩300M × 4.32% ÷ 12?
Nothing is repaid, so the balance stays at ₩300 million, and like our loan calculator we use the annual rate divided by 12. 300,000,000 × 0.0432 ÷ 12 = ₩1,080,000. A bank counting actual days may differ by hundreds or thousands of won a month.
Is a grace period always a loss?
Total interest goes up. What the deferred principal is worth to you elsewhere differs from person to person, and the calculator doesn’t judge that; it only shows the extra interest to the won.
What if my bank’s product sheet shows different numbers?
Fees, daily interest, floating rates, the first month’s days and rounding can all differ. We didn’t check any bank’s contract or product sheet.
Sources
- Our arithmetic. The grace, equal-instalment and equal-principal formulas are ours, not set in law; the definitions match our loan repayment calculator (checked 4 November 2026). Every figure in the tables was matched between a Python reference and the calculator.
- Not read. Banks’ loan terms and product sheets, how the FSS FINE loan calculator handles grace, and fees for extending grace or repaying early.
- What we added. The “worth noting” column and the example terms (₩300M, 4.32%).
Where to check further
- Your loan agreement and product sheet — grace, method and how interest is counted.
- Your bank — extending grace and early repayment.
Written on 4 November 2026. The content is from the source; the glosses are ours.
