Personal Loan Calculator
Estimate the monthly payment, total cost, and interest on a fixed-rate personal loan.
What it does
A personal loan is an installment loan that is usually unsecured, meaning it is not tied to a car or a house. The borrower receives a lump sum and repays it with equal monthly payments over a set term. Each payment covers interest for that month plus a slice of the principal.
This calculator takes the loan amount, annual percentage rate, and term, then returns the monthly payment, total paid, and total interest. It is useful when comparing offers from two lenders, testing whether a consolidation loan fits a budget, or checking the cost of a smaller short-term loan.
The payment is built from an amortization formula. The annual rate is divided by 12, and the term is converted to months. Early payments put more money toward interest because the balance is high. Later payments put more toward principal as the balance falls. Stretching the term lowers the monthly figure but usually raises the total interest.
The result does not include origination fees, application fees, late charges, insurance, or optional products. It also assumes a fixed rate and every payment made on time. A lender's advertised APR may include fees and can differ from the note rate, so compare the full offer rather than the payment alone.
How to use
- Enter the amount you plan to borrow, before any fees are deducted.
- Enter the annual interest rate or APR as a percent, such as 11 for 11%.
- Enter the term in years. The tool converts it to monthly payments.
- Read the monthly payment first, then compare total paid and total interest.
- Change one input at a time to see which factor drives the cost.
- Ask the lender for an APR that includes fees before you sign.
Formula
- P
- Principal, the amount borrowed in dollars.
- APR
- Annual percentage rate before dividing by 12.
- r
- Monthly interest rate as a decimal.
- n
- Total number of monthly payments.
- M
- Fixed monthly payment in dollars.
A zero percent loan divides the principal by the number of payments. The payment is rounded for display, so multiplying the shown payment by the number of months can differ from the total by a few cents. Extra payments shorten the term and reduce interest, but this tool assumes the scheduled payment only.
Worked example
Example: $15,000 at 11% for 5 years
Loan amount 15000, annual rate 11%, term 5 years.
- Monthly rate: 11 / 12 / 100 = 0.0091667.
- Number of payments: 5 x 12 = 60.
- Growth factor: (1 + 0.0091667)^60 = 1.728916.
- Monthly payment: 15000 x 0.0091667 x 1.728916 / 0.728916 = $326.14.
- Total paid: 326.14 x 60 = $19,568.18. Interest: 19,568.18 - 15,000 = $4,568.18.
- First payment split: 15000 x 0.0091667 = $137.50 interest, leaving $188.64 for principal.
Reference table
| Term | Monthly payment | Total paid | Total interest |
|---|---|---|---|
| 3 years | $491.08 | $17,678.91 | $2,678.91 |
| 5 years | $326.14 | $19,568.18 | $4,568.18 |
| 7 years | $256.84 | $21,574.27 | $6,574.27 |
Limits
- Origination, application, late, and prepayment fees are not included.
- The rate is fixed for the full term and every payment is made on schedule.
- Insurance, collateral, and optional add-on products are excluded.
- A lender's APR may include fees and differ from the rate entered here.
Common mistakes
- Comparing the note rate instead of the APR that includes fees.
- Shopping by monthly payment while ignoring total interest.
- Choosing a longer term just to fit the payment without checking the extra cost.
- Entering a monthly rate where the annual rate belongs.
- Assuming a personal loan is secured when it is usually unsecured.
Try it yourself
Quick checks. Answers sit tucked under each question.
$10,000 at 8% for 3 years: what is the monthly payment and total interest?
$313.36 per month, $11,281.09 total paid, $1,281.09 interest.
$20,000 at 12% for 4 years: what is the monthly payment?
$526.68 per month, $25,280.48 total paid, $5,280.48 interest.
For $15,000 at 11%, how much does a 7-year term save per month compared with 3 years, and what does it cost in interest?
The payment falls from $491.08 to $256.84, a $234.24 monthly saving. Interest rises from $2,678.91 to $6,574.27, an extra $3,895.36.
Questions
What is a personal loan?
An installment loan, usually unsecured, that pays a lump sum and is repaid with fixed monthly payments over a set term.
How is the monthly payment calculated?
With the standard amortization formula using the principal, monthly rate, and number of payments. The payment stays fixed while the interest and principal shares change.
Does a longer term lower the payment?
Yes, because the principal is spread over more months. Total interest usually rises because the balance stays outstanding longer.
What is the difference between the interest rate and APR?
The interest rate prices the loan. APR also includes many fees and is meant to show the yearly cost of borrowing, so it is the better comparison figure.
Can I pay the loan off early?
Many personal loans allow it, but some charge a prepayment penalty. Check the loan agreement before making extra payments.
Does this calculator include taxes or insurance?
No. It covers principal and interest only. Add any required fees or insurance separately.
Sources
- Consumer Financial Protection Bureau: What is a personal installment loan?
- Consumer Financial Protection Bureau: What is amortization?