Personal Loan Calculator — Free Payment and Interest Estimator

How to Use the Personal Loan Calculator

Our personal loan calculator gives you instant answers about your loan payment, total interest cost, and a complete month-by-month repayment schedule. Use it to compare offers from different lenders or to determine the loan amount and term that fit your budget.

1. Enter the loan amount. Input how much you want to borrow. Personal loans typically range from $1,000 to $50,000, though some lenders offer up to $100,000. Enter the exact amount you need, keeping in mind that some lenders charge origination fees that reduce your proceeds.
2. Set the annual interest rate. Enter the APR from your lender quote or pre-qualification. If you have not yet checked rates, use our reference ranges: 6-10% for excellent credit, 10-15% for good credit, 15-22% for fair credit. The calculator updates instantly, so try different rates to see the impact.
3. Enter the loan term in months. Input how many months you want to repay the loan. Common personal loan terms are 24, 36, 48, and 60 months. The calculator shows the equivalent in years and months for reference. Try different terms to find the sweet spot between monthly affordability and total interest cost.
4. Review the results. The summary panel shows your fixed monthly payment, total interest over the life of the loan, total repayment amount (principal plus interest), and a pie chart showing the proportion of principal versus interest in your total cost.
5. Examine the amortization schedule. The table shows every single monthly payment with the exact split between principal and interest, plus the remaining balance. Use this to see when the crossover point occurs (when principal exceeds interest in each payment) and to plan any extra payment strategy.

Compare different scenarios by changing any input. For example, see how a 1% rate reduction or a 12-month shorter term affects your total interest cost. This helps you prioritize: is improving your credit score for a lower rate worth waiting, or should you lock in today offer?

Personal Loan Payment Formula

Personal loans use the same standard amortization formula as mortgages and auto loans. Understanding this formula helps you verify lender quotes and make informed decisions about your borrowing.

Where:

• M = Fixed monthly payment
• P = Loan principal (amount borrowed)
• r = Monthly interest rate (APR ÷ 12 ÷ 100)
• n = Total number of monthly payments

Worked Example

Calculate the payment for a $15,000 personal loan at 10.5% APR for 36 months:

1. Monthly rate: r = 10.5% ÷ 12 ÷ 100 = 0.00875
2. Total payments: n = 36
3. Growth factor: (1.00875)³⁶ = 1.3688
4. Monthly payment: $15,000 × [0.00875 × 1.3688] / [1.3688 − 1] = $15,000 × 0.01198 / 0.3688 = $487
5. Total repayment: $487 × 36 = $17,528
6. Total interest: $17,528 − $15,000 = $2,528

In this example, you pay $2,528 in interest over 3 years, which represents 16.9% of the loan amount. At 10.5%, each dollar borrowed costs about 17 cents in interest over a 3-year term. If the rate were 7% instead, total interest drops to $1,633, saving $895. This illustrates why even a few percentage points make a meaningful difference in total cost.

Practical Personal Loan Examples

These real-world scenarios show how personal loans are commonly used and how different amounts, rates, and terms affect the total cost.

Debt Consolidation: Combining Credit Cards

Natalie has three credit cards: $5,200 at 22% APR, $4,100 at 19% APR, and $3,700 at 24% APR. Total balance: $13,000 with a blended average rate of about 21.5%. She qualifies for a $13,000 personal loan at 9.5% for 48 months. Her new single payment is $327 per month, down from $520 in combined minimum payments on the cards. Total interest on the personal loan is $2,675 versus approximately $8,000 to $12,000 in credit card interest over the same period (depending on minimum payment behavior). She saves approximately $5,000 to $9,000 and has a guaranteed payoff date of 48 months.

Home Improvement Project

Michael plans a $20,000 kitchen renovation. He compares a personal loan at 8.5% for 60 months ($411/month, $4,677 total interest) versus a home equity loan at 7.0% for 120 months ($232/month, $7,864 total interest). While the home equity loan has a lower rate and payment, it costs $3,187 more in total interest due to the longer term and puts his home at risk as collateral. The personal loan costs more per month but saves money overall and carries no risk to his home. He chooses the personal loan with a plan to pay it off in 48 months by adding extra payments when possible.

Emergency Medical Expense

Sarah faces a $8,500 dental procedure not fully covered by insurance. She compares financing options: a medical credit card at 0% for 18 months (then 26% APR) versus a personal loan at 11% for 24 months ($397/month, $1,035 total interest). If Sarah is confident she can pay $472/month to clear the medical credit card within 18 months ($8,500 / 18), the 0% card saves her $1,035. But if she cannot pay it off in 18 months, the remaining balance at 26% would cost far more. She chooses the personal loan for the certainty of fixed payments and a guaranteed payoff in 24 months.

Wedding Financing

Emma and David need $12,000 to supplement their wedding savings for a total budget of $25,000. They take a personal loan at 7.9% for 36 months, with a monthly payment of $376 and total interest of $1,525. They chose 36 months to pay it off before their 3rd anniversary. If they had chosen 60 months, the payment would drop to $242 but total interest would rise to $2,511. By choosing the shorter term, they save $986 in interest. They also plan to apply half of any wedding gift money toward the loan principal to pay it off even faster.

Personal Loan Tips and Borrowing Guide

Borrowing smart means getting the best rate, choosing the right term, and understanding the true cost of your loan. These strategies help you make the most of a personal loan while minimizing its cost.

Shop Multiple Lenders

Personal loan rates vary significantly between lenders. Check at least three to five: your primary bank, a local credit union (they often have the lowest rates for members), and two to three online lenders (such as SoFi, Marcus, LightStream, or Discover). Many offer free pre-qualification with a soft credit check that does not affect your score. Compare the APR (not just the interest rate) because APR includes origination fees and gives you the true cost of borrowing.

Improve Your Rate Before Borrowing

If your loan is not urgent, spending 3 to 6 months improving your credit score before applying can save significant money. Pay down credit card balances to reduce your utilization ratio below 30% (ideally below 10%), correct any errors on your credit report, avoid opening new credit accounts, and make all existing payments on time. A 50-point credit score improvement can reduce your personal loan rate by 2-5%, which on a $15,000 loan for 36 months could save $1,000 to $2,000 in interest.

Borrow Only What You Need

It is tempting to borrow extra "just in case," but every additional dollar accrues interest. If you need $12,000 for a specific purpose, borrow $12,000 rather than $15,000. The extra $3,000 at 10% for 36 months costs $481 in additional interest. Calculate your exact need, add a small contingency (5-10%), and borrow that amount. If you end up with leftover funds, immediately apply them as a principal payment to reduce your balance and interest costs.

Use Automatic Payments for Rate Discounts

Many lenders offer a 0.25% to 0.50% APR discount when you enroll in automatic payments. On a $15,000 loan, a 0.25% discount saves about $70 over 36 months and also eliminates the risk of late payments (which carry fees of $25 to $50 and damage your credit score). Set up autopay from your checking account on a date that aligns with your paycheck, and always keep enough in the account to cover the payment.

Common Mistakes to Avoid

• Not comparing APR to interest rate. The interest rate is the cost of borrowing. The APR includes the interest rate plus origination fees and other charges, making it the true cost. Two loans at 10% interest but different origination fees (0% vs 4%) have very different APRs. Always compare APR when shopping.
• Extending the term to lower your payment when you can afford more. A $15,000 loan at 10% costs $2,528 interest over 36 months but $4,396 over 60 months. Only extend the term if the shorter term payment genuinely does not fit your budget. If you can afford $487/month, do not choose $323/month and pay $1,868 more in interest.
• Using personal loans for recurring expenses. Personal loans are appropriate for one-time expenses (consolidation, renovation, medical). Using them for recurring costs (rent, groceries, monthly bills) signals a budget problem that a loan will not solve, as it only delays the financial stress while adding interest costs.
• Consolidating credit cards and then using the cards again. The most common debt consolidation failure is running up credit card balances after rolling them into a personal loan. This doubles your debt instead of reducing it. If you consolidate, close or freeze the cards to prevent backsliding, or at minimum commit to paying the full statement balance each month.
• Accepting the first offer without negotiating. Lender rates are often negotiable, especially at banks and credit unions where you have an existing relationship. If you have a pre-qualification at 10% from an online lender, ask your bank if they can match or beat it. Even a 0.5% reduction saves hundreds over the life of the loan.