The formula
How it works
Estimate the monthly payment and total cost of a personal loan from the amount, the interest rate and the term. Personal loans are unsecured, so the rate — and the total interest — depends heavily on your credit.
FAQ
Why are personal loan rates higher than mortgages?
Personal loans are unsecured — there is no house or car for the lender to repossess — so they carry more risk and a higher rate. A strong credit score is the main way to get a lower one.
Can I pay it off early?
Usually yes, and it saves interest, but check for early-repayment fees. Even small extra payments toward the principal shorten the loan and cut the total interest noticeably.
Does this calculator assume a fixed rate?
Yes — it treats the APR as constant for the whole term, which matches how most personal loans work. A variable-rate loan would need the payment recalculated whenever the rate changes.
Why is my actual APR higher than the advertised rate?
Lenders often charge an origination fee, which is deducted from the amount you receive but still has to be repaid, effectively raising the true cost above the headline rate. Always compare the APR, not just the interest rate, when shopping around.
How much does the loan term change the total cost?
A longer term lowers the monthly payment but increases the total interest paid, since you carry the balance for more months. A shorter term raises the payment but can cut the total interest substantially — try both in the calculator to see the trade-off.
How does my credit score affect the numbers here?
The calculator does not set the rate for you — it just applies whatever APR you enter. In practice, a higher credit score typically qualifies you for a lower rate, so it is worth checking your score before comparing offers.
What happens if I miss a payment?
Missing a payment usually triggers a late fee and can hurt your credit score, and interest keeps accruing on the outstanding balance regardless. This calculator assumes every payment is made on schedule, so a missed payment would extend the real payoff time beyond what is shown.
About the personal loan calculator
This calculator finds the monthly payment and total cost of a personal loan — a fixed sum borrowed and repaid in equal instalments. Personal loans are used for everything from consolidating debt to funding a big purchase, and because they are unsecured, the interest rate can vary widely with your credit. Seeing the payment and the total interest together makes it easy to judge whether a loan fits your budget.
How to use it
Enter the amount you want to borrow, the annual interest rate, and the term in years. The calculator shows the monthly payment, the total interest over the life of the loan, and the total you will repay. For example, a $15,000 personal loan at 10% over 4 years costs about $380 a month, with roughly $3,250 of interest on top. Shorten the term to pay less interest, or lengthen it for a smaller monthly payment.
The formula
The monthly payment is , where is the loan amount, is the monthly interest rate (the APR divided by 12) and is the number of monthly payments. Total interest is the sum of all payments, , minus the amount borrowed. The lower the rate and the shorter the term, the less interest you pay overall.
Where it is used
Borrowers use it to compare personal loan offers and to check a payment fits their monthly budget before applying. It is especially useful for debt consolidation, where you can compare the new loan’s cost against the cards or loans it would replace. Lenders run the same maths to quote payments, and comparing the total interest — not just the monthly figure — is the key to finding the cheapest deal.