Personal Loan Calculator – Estimate Monthly Payments
Work out the monthly payment and total cost of an unsecured personal loan.
About the Personal Loan Calculator
What is the Personal Loan Calculator?
A personal loan calculator estimates the fixed monthly payment on an unsecured installment loan, which is repaid in equal amounts over a set term.
Why use this calculator?
Personal loans are useful for consolidating debt or covering a one-off expense, but rates vary widely. Checking the payment and total interest first helps you decide whether a loan is worth it.
How to use it
- Enter the amount you want to borrow.
- Enter the offered annual interest rate (APR).
- Choose the repayment term in years.
- Add any origination fee if the lender charges one.
- Compare the monthly payment against your budget.
Formula
M = P · r(1+r)^n / ((1+r)^n − 1)
The APR, not the interest rate, is the best figure for comparing loans because it includes fees.
Frequently Asked Questions
Does a personal loan require collateral?
No. Personal loans are unsecured, so they rely on your creditworthiness rather than an asset. That is why rates are usually higher than for secured loans.
Will a personal loan hurt my credit score?
Applying causes a small, temporary dip from the hard inquiry. Making on-time payments and lowering your credit-card utilization generally improves your score over time.
What is the difference between principal and interest?
The principal is the amount you borrow. Interest is the fee charged for borrowing it, shown either as an annual rate (APR) or a periodic rate. Early payments go mostly toward interest; later payments go mostly toward principal.
How does the loan term affect my payment?
A longer term lowers the monthly payment but increases the total interest you pay over the life of the loan. A shorter term raises the monthly payment but costs less overall.
What is an amortization schedule?
It is a table that breaks every payment into its principal and interest portions and shows the remaining balance after each payment.
Should I make extra payments?
Extra payments reduce principal directly, which shortens the loan and cuts total interest. Many loans have no prepayment penalty, but check your agreement first.
What is APR and how is it different from the interest rate?
The interest rate applies only to the balance. The APR (annual percentage rate) also includes fees and points, so it reflects the true yearly cost of the loan.
What is a credit utilization ratio?
It is the share of your available credit that you are using. Keep it below 30%, and ideally below 10%, to protect your credit score.
Will paying off a card hurt my score?
No. Paying down balances usually helps your score by lowering utilization. Closing the account, however, can reduce your available credit.
What is the minimum payment trap?
Minimum payments are set low, so most of the payment goes to interest and the balance lingers for years. Paying more than the minimum saves substantial interest.