Personal Loan Calculator
Enter a loan amount, interest rate, term and fee. A $15,000 loan at 12 percent over 36 months has a monthly payment of $498.21.
How the personal loan calculator works
A personal loan is repaid in equal monthly installments over a fixed term. Each payment covers that month’s interest plus some principal. The calculator uses the standard amortization formula and also accounts for an origination fee, which many lenders deduct from the money you receive.
The formulas
Here i is the interest rate divided by 12 and n is the number of months. Example: A $15,000 loan at 12 percent for 36 months has a payment of $498.21. Total interest is $2,935.73. With a 3 percent fee of $450.00 you receive $14,550.00, and the total cost of borrowing is $3,385.73. You repay $17,935.73 in all. Figures are illustrations.
Reading the result
Because the fee is taken from the proceeds but you still repay the full amount, a fee raises the real cost beyond the stated rate. Compare loans on the APR the lender discloses, which includes certain fees, not on the interest rate alone. A longer term lowers the payment but raises total interest. The Consumer Financial Protection Bureau has a plain-language page on what a personal loan is. For a loan with interest-only periods see the interest-only loan calculator, and to see how extra payments shorten a loan use the loan payoff calculator. This is an estimate, not an offer of credit.
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Frequently asked questions
How is a personal loan payment calculated?
With the amortization formula: loan x i / (1 – (1 + i)^-n), where i is the monthly rate and n is the number of payments. The default loan comes to $498.21 a month.
What is an origination fee?
A fee some lenders charge for processing the loan, usually a percentage of the amount. It is often deducted from the funds you receive.
Does a longer term cost more?
Usually yes. The monthly payment is lower, but you pay interest for more months.
Is APR the same as the interest rate?
Not always. APR includes certain fees along with interest, so it is the better number for comparing offers.
Can I pay the loan off early?
Often, but check for prepayment penalties. Paying early cuts the interest you owe.
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