What a loan actually costs each month and in total, with the full repayment schedule — and, on the other tab, what a deposit or a monthly savings plan is worth at maturity after tax.
Two repayment structures dominate Korean lending and they cost different amounts. 원리금균등 keeps every monthly payment identical, so early payments are mostly interest and the balance falls slowly. 원금균등 repays a fixed slice of principal each month, so the first payment is the largest and the total interest paid is lower. Which one you are on changes what an early repayment is worth.
The schedule here is computed month by month rather than from a closed-form approximation, so you can see the split between interest and principal for each payment and where the balance actually stands part-way through. Deposit and instalment-savings figures apply the 15.4% Korean interest income tax to the interest, because the headline rate a bank advertises is before that deduction.
The headline interest rate is not the cost of a loan. Fees charged at origination, compulsory insurance, and any requirement to keep a balance on deposit all raise the effective rate, sometimes considerably on a short term where a fixed fee is spread over few payments. A comparison between two offers therefore has to be made on total cost over the same term rather than on the advertised percentage, which is what the total interest figure here is for.
Early repayment is worth checking against the schedule rather than assumed. On 원리금균등 the early payments are mostly interest, so repaying a lump sum in year two removes far more future interest than the same amount repaid in year fifteen — the balance it eliminates would have been accruing for thirteen more years. Against that sits the prepayment penalty most Korean lenders charge for the first three years, typically as a percentage of the amount repaid and tapering over time. The schedule shows what the repayment saves; the penalty is the number to weigh it against.
On the savings side the 15.4% tax on interest income is the part most calculators leave out, and it is not a rounding error: it is 14% income tax plus a 1.4% local surcharge, deducted at source, so an advertised 4% return is closer to 3.38% in hand. Simple and compound interest differ more than expected over longer terms as well, and most Korean deposit products quote simple interest on the principal rather than compounding monthly. Both are computed separately here so the comparison is like for like.
Lenders add arrangement fees, apply their own rounding at the won level, and may use a different day-count convention. Treat this as an accurate estimate rather than a quote.
No. Early-repayment penalties vary by product and typically taper over the first three years, so they cannot be modelled generically. Ask your lender for the exact schedule.
Simple interest is calculated once on the principal. Monthly compounding adds each month’s interest to the balance so it earns interest too. Most Korean deposit products quote simple interest.