Personal Loan Calculator

Personal loan calculator at a glance#

A personal loan calculator works out the fixed monthly payment on an unsecured personal loan from three inputs: the amount you borrow, the annual interest rate, and the loan term in months. It uses the amortization formula M = P x [r(1 + r)^n] / [(1 + r)^n - 1], where P is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments.

For a $15,000 personal loan at 10% over 4 years, r is 0.10 / 12 (about 0.008333) and n is 48 months, so the monthly payment is about $380.44. Over the full term you pay $18,261.06, which is $3,261.06 in interest on top of the $15,000 you borrowed.

The table shows the monthly payment at a 10% annual rate, a common range for personal loans, so a $20,000 loan costs $424.94 a month over 5 years. A lower rate or a longer term lowers each payment, but a longer term adds more total interest. Your actual rate depends on your credit score, income, and the lender, and an origination fee is sometimes deducted from the amount you receive.

Enter your loan amount, interest rate, and term in the calculator above for the exact monthly payment and total interest. These figures assume a fixed rate and equal payments, so fees and rounding can shift the final number by a few dollars.

What makes a personal loan unsecured#

A personal loan is unsecured, meaning no asset backs it. The lender cannot claim a house or car if you default, so it relies on your credit score, income, and existing debts to decide approval and rate. That added risk is why personal loans carry higher rates than secured options like mortgages or auto loans. Most range from $1,000 to $50,000, with terms of 1 to 7 years and rates often between 10% and 25%.

Your credit sets the rate#

Rate is the single biggest driver of cost, and it tracks your credit. Strong credit, roughly 700 and up, earns the lowest rates; fair credit pays more; poor credit either gets declined or faces high rates and fees. The gap is large. A $12,000 loan over 4 years costs $292.96 a month and $2,061.84 in interest at 8%, but $352.50 a month and $4,920.00 in interest at 18%. Same loan, same term, but the higher rate more than doubles the interest. Checking your credit before you apply tells you which tier to expect.

Origination fees and the APR#

Many personal loans charge an origination fee of 1% to 5% of the amount, deducted from the funds you receive. A $10,000 loan with a 5% fee nets you $9,500 but you still repay $10,000 plus interest. Because the fee raises your real cost, compare loans by APR, which folds the fee into a yearly percentage, rather than by the rate alone. Under 3% is a competitive origination fee, and some lenders charge none.

Consolidating higher-rate debt#

The most common use of a personal loan is consolidating credit card balances, which often carry rates above 25%. Rolling that debt into a personal loan at a lower rate cuts the interest and replaces several due dates with one fixed payment. Consolidation only helps if the new rate, after the origination fee, beats what you pay now, so run both numbers before you commit.

Where to borrow#

Banks and credit unions fund loans from deposits and tend to offer competitive rates, though approval can be slower and stricter. Online and peer-to-peer lenders run fully digital applications, often fund within a day, and can match or beat bank rates. Payday and other high-cost lenders approve poor credit but charge APRs that can exceed 400%; avoid them. Pre-qualifying with two or three lenders lets you compare real APRs with a soft credit check before a formal application.

Frequently asked questions#

How does the calculator estimate my payment?#

It uses the amortization formula M = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1) on the loan amount, monthly rate, and number of months. A $15,000 loan at 10% over 4 years is $380.44 a month, with $3,261.06 in total interest.

How does my credit score affect the rate?#

Higher scores signal lower risk, so lenders offer lower rates. The strongest credit can land rates near the bottom of a lender’s range, while scores in the 600s usually pay several points more.

What fees should I watch for?#

Origination fees of 1% to 5% are common and come out of the funds you receive. Some loans add prepayment penalties or late fees. Comparing APRs rather than rates captures these costs.

Can extra payments save interest?#

Yes, if the loan has no prepayment penalty. Extra money reduces the principal, which shortens the term and cuts the interest charged from that point forward.

How do unsecured and secured loans differ?#

An unsecured personal loan needs no collateral and charges a higher rate. A secured loan is backed by an asset, which lowers the rate but lets the lender claim that asset if you stop paying.

How fast is the money?#

Online lenders often deposit funds within 24 hours of final approval. Banks and credit unions can take longer because their verification and funding steps are slower.