Personal Loan Calculator: Estimate Your Monthly Payments and Total Interest

You can use a personal loan for almost anything, from consolidating debt or covering unexpected expenses to funding home renovations or paying for a cross-country move. But no matter the reason, make sure you can afford the monthly payments and overall loan costs before signing on the dotted line.

Use the personal loan calculator below to see how changing the loan amount, interest rate, and repayment term impacts how much you pay each month and how much you’ll spend over the life of the loan.

Calculate my personal loan payment

How to interpret your results

After you input the loan amount, interest rate, and loan term, the calculator will generate three numbers:

• Total payment: This shows you what you’ll pay the lender by the end of the loan, including the principal amount (what you originally borrowed) and interest.
• Total interest: This shows the amount you’ll pay in interest over the life of the loan.
• Monthly payment: This shows you how much you’ll pay each month during the repayment term. This monthly payment will not change, so make sure you can comfortably afford it with your current budget — and understand that it will tie up your budget for the next several years.

If any of the results are too high for your budget or comfort level, you can tinker with the inputs to see how they change. For instance:

• Decreasing the loan amount means you’re borrowing less, which will reduce your monthly payment and the amount of interest you ultimately pay. Keep in mind that reducing the loan amount means you’ll receive less money; if you need a specific dollar amount, there might not be much wiggle room here.
• Decreasing the interest rate could lower payments and total interest costs. You generally can’t change your credit score overnight, but you could potentially lower your rate by applying with a co-borrower, choosing a shorter repayment term, getting a secured loan, or using the loan to consolidate debt.
• Decreasing the loan term will reduce interest costs over the life of the loan, but it also increases the size of your monthly payment. On the flip side, increasing the loan term lowers your monthly payment, but it increases the overall cost of the loan — and it means your budget will be hampered by a personal loan payment even longer.

How the calculator works

To generate your estimate, this personal loan calculator uses three inputs:

• Loan amount: How much you want to borrow
• Interest rate: The percentage you’ll pay to borrow money — interest is paid monthly and calculated on the current amount you owe. 
• Loan term: The repayment period for the loan, expressed in years

Enter these numbers, and the calculator will show you your estimated monthly payment, total interest spent over the life of the loan, and the overall total loan cost.

Behind the scenes, the calculator applies an amortization formula (this is the same math lenders use to set up your repayment schedule). Because your loan balance shrinks with each monthly payment, the amount of interest you owe each month also shrinks. This enables you to pay more toward the balance. To keep your payments predictable, lenders spread interest and principal payments across your repayment term. So, you pay the same amount each month even though less of it goes toward interest and more toward principal over time.

Keep in mind that these results are estimates based on the inputs you provide. Your actual APR and costs might differ depending on your credit score, your income, what fees you pay, and the lender you choose.

Loan interest, APR, and amortization explained

Personal loan calculations are a little complicated, especially when you try to wrap your brain around interest vs. APR and how amortization works. We’ll walk through these terms and how to calculate interest below.

How to calculate loan interest (and how not to)

Most personal loan lenders charge simple interest every month; that means interest is calculated based on only your remaining loan balance (not the balance plus accrued interest).

It’s best to use a personal loan calculator to see how much interest you’d owe, ideally based on your quoted rate for various loan amounts and repayment terms. Alternatively, you could try to figure it out by hand — but you won’t get a good estimate unless you can do advanced algebra. One easy approach is to use the simple interest formula, but it’s also ineffective. Here’s how you’d use it and why it doesn’t work: 

Interest amount = Loan amount x Interest rate x Loan term

Now, use it to calculate interest on a $10,000 loan with a 10% interest rate over a three-year term:

Interest amount = $10,000 x .10 x 3 years = $3,000 ← this is incorrect

When you punch those three inputs into the personal loan calculator above, you won’t get $3,000 as the total interest paid. Instead, it’s only $1,616. That’s because the simple interest formula assumes you owe the full $10,000 for all three years, but that’s not how a personal loan works. In reality, you’re paying down the balance each month, so the amount of interest shrinks right along with it. By the time you’re in year three, you owe a lot less than $10,000. In fact, after month 1, the simple interest formula stops working.

What is amortization?

This process, wherein your balance (and your interest charges) gradually decrease over the life of the loan but your payment stays the same, is called amortization. And it’s why your actual total interest is lower than this simple interest formula suggests.

On a loan that’s amortized, you gradually pay off more principal and less interest with each passing month.

On a loan that isn’t amortized, your initial monthly payment would be much higher, and your final payment would be significantly smaller. Amortization ensures your payments remain fixed (and thus predictable) over the life of the loan. 

The exact formula for amortization is complex (which is why we recommend using a calculator), but let’s take a high-level look at how it works. Assume you borrow $10,000 at a 12% APR for three years (36 months):

1. The lender divides 12% (.12) by 12 months (12 months per year). This results in a 1% (0.01) monthly rate.
2. Each month, the lender multiples your loan balance by 0.01. That’s $100 in interest in the first month (0.01 x $10,000).
3. If your total monthly payment is $332, then $100 goes to interest, and $232 goes to the principal.
4. In month two, your loan balance is $9,768 ($10,000 - $232).
5. The lender multiples $9,768 by 0.01. That’s $97.68.
6. Your total monthly payment remains $332. This time, $97.68 goes to interest, and $234.32 goes to the principal.
7. The loan continues this way for the full 36 months.

By the end of the loan term, your $232 monthly payment would include much more principal than interest. That final 36th payment would pay off your loan in full.

What is APR?

Your annual percentage rate (APR) is the total cost of borrowing money, including the interest rate and any upfront fees (like an origination fee), expressed as a percentage. Personal loan lenders are required by the Truth in Lending Act (TILA) to show you a loan’s APR so you can get a true sense of cost. 

But while the APR shows you the total cost of borrowing, it’s not necessarily indicative of your monthly payment. Use the APR to compare overall costs between loans and lenders; use the interest rate to determine monthly payment and total interest costs.

If you’re comparing costs between loans with an origination fee, add the fee amount to the total interest amount to see how much the loan would cost in full. For example, if a $10,000 loan has a 10% origination fee, you’d pay $1,000 upfront (typically coming out of the loan funds) in addition to the interest rate. If the rate on that loan is 10% and the term is three years, you’d also pay $1,616 in interest. 

Total cost = $1,000 (origination fee) + $1,616 (total interest) = $2,616

On this loan, your APR would be 17.4% (this rate is what the lender is required to show you). A loan with a lower interest rate may seem more affordable, but you can see that a loan with an origination fee (especially a large one) can lead to much higher costs.

Learn More: APR vs. Interest Rate on a Personal Loan

Loan rates by credit score and income

If you’re curious how likely you are to qualify for a personal loan, what rate you might get, or how much money you might be approved to borrow, take a look at the charts below, which are based on 12 months of Credible user data. 

Borrowers with excellent credit are most likely to qualify for the lowest interest rates and highest loan amounts, while the opposite is likely for borrowers with fair and bad credit. 

Debt consolidation loan calculator

Use the debt consolidation loan calculator below to see how much you could save by paying off high-interest credit card or personal debt with a lower-rate consolidation loan.

Debt consolidation loans are a type of personal loan that allow you to pay off existing debts, including credit cards, medical debt, and unsecured loans. The purpose is usually twofold:

1. Lower rates or lower monthly payment: A debt consolidation loan should ideally have a lower APR than any debts you’re paying off. This would save you money in the long run. Alternatively, if you can’t afford your current monthly debt payments, consolidating to a loan with a longer loan term could reduce your monthly payment to something more manageable.
2. One payment date: If you’re juggling multiple credit cards and loans, keeping track of each monthly payment date can be overwhelming. Consolidating the debt into one loan gives you one monthly payment date to manage.

Consolidating debts that have a short repayment term to a loan with a longer repayment term could mean you spend more on interest in the long run. To ensure debt consolidation is worthwhile, enter a few details about your existing debt and your new loan offer in the calculator below.

Common personal loan fees

While some lenders, such as LightStream and Citi, offer personal loans with no fees, many lenders add fees, either upfront or throughout the loan:

• Origination fee (0% to 15%): Many lenders charge an origination fee. This is represented as a percentage of the total loan amount. Though the fee is charged upfront, you don’t have to pay out of pocket; instead, it’s typically deducted from your loan proceeds. For instance, if you get a $10,000 personal loan with a 10% origination fee, the lender would deduct $1,000 from the loan; you’ll receive $9,000, but you’ll have to repay the full $10,000. If you have good or better credit, you may be able to find a personal loan without an origination fee.
• Documentation fee: Some lenders may charge a separate documentation fee upfront. This covers the cost to process the loan paperwork.
• Credit and disability insurance: This optional coverage might be available when you take out a personal loan. Should you become disabled, lose your job, or pass away, this insurance can pay off some or all of the loan. The cost depends on the size of the loan and extent of the coverage.
• Late fee ($10 to $50, or 5% to 15% of the payment): If you make a payment after the due date, your lender may charge a late fee — a flat amount or a percentage of the payment amount, depending on the lender. Most have a grace period (usually around 15 days). But keep in mind: late payments are reported to the credit bureaus, which can lower your credit score.
• Return fee ($10–$50): If you have automatic payments set up for your personal loan, but there aren’t enough funds in your bank account to cover the cost, the lender may charge you an insufficient funds fee. Similarly, if you write a check that bounces, the lender may charge a returned check fee. These amounts vary by lender, and it’s possible your bank would charge a separate fee if this happens.

How to compare personal loans and get the best rate

To get the best rate on personal loans, focus on improving your credit score and comparing multiple lenders. Here are some tips to find the best personal loan for you:

1. Narrow down your list based on eligibility

Between banks, credit unions, and online lenders, the market has thousands of options for personal loans. You can’t possibly research and compare them all.

Start by narrowing down your list to what you can realistically qualify for. That means finding lenders that approve borrowers:

• With your credit score
• With your income
• Who live in your state
• For the amount of money you want to borrow

Here are some of the most common personal loan eligibility requirements to get started.

2. Get prequalified to compare rates, fees, and other details

Once you’ve narrowed down your list to lenders that fit your credit profile, income, and needs, get prequalified. Prequalification doesn’t require a hard credit pull, so there’s no impact on your credit score. You can prequalify individually on lender websites or with multiple lenders at once via a loan marketplace (like Credible).

When you get prequalified, you can see the APR, loan amount, and loan terms you’ll likely be approved for. However, these numbers can change when you actually apply and the lender takes a closer look at your credit, income, and assets.

The best way to compare personal loans after prequalifying is to look at the APR. Remember, APR accounts for both the interest rate and upfront fees, so it is the most accurate way to calculate the total cost of borrowing.

3. Work on your credit score and DTI if options are limited

If you’re struggling to prequalify and can wait a few months, work on improving your credit score and reducing your debt-to-income (DTI) ratio, Your DTI measures how much of your monthly income goes to debt payments (minimum credit card payments, student loan payments, car payments, mortgage payments, etc.), and is used by lenders to assess how much loan you can afford (or if you can afford one at all). Here’s a closer look at how to improve each:

• Improve your credit score: Making on-time payments every month is the best way to improve your credit score long-term. But if you have a willing family member or very close friend with good credit, you might ask to become an authorized user on their credit card. This can be a quick-win way to reduce your credit utilization, improve your payment history, and add an account in good standing (all without a hard credit pull). Just don’t use the card. You should also review your credit report and dispute errors if needed. Credible lets you monitor your credit score for free so you can track your progress.
• Lower your DTI: Lowering your DTI requires reducing your monthly debt obligations and/or increasing your monthly income. Wiping out one loan entirely means you no longer have to account for that loan payment in your monthly expenses, which lowers your DTI. Alternatively, you could seek a raise, second job, or side hustle to increase your monthly income (and reduce your DTI).

“The best and quickest fix is lower your debt-to-income ratio,” says R.J. Weiss, CFP and founder of The Ways to Wealth. “That may mean making some short-term changes, but lenders place a lot of weight on debt-to-income ratio, and a high ratio is going to hurt your ability to qualify for credit.”

4. Try a local credit union

Online lenders are often a great choice for low-rate personal loans, but you shouldn’t always rule out brick-and-mortar lenders, especially if you meet eligibility criteria for a local credit union.

“Shop around and check with credit unions,” says Chad Gammon, certified financial planner and owner of Custom Fit Financial. But he offers a caveat: “Make sure they [conduct] soft inquiries so this doesn’t hurt your credit score” before you apply — it’s important to compare multiple quotes before going with any lender.

5. Consider a cosigner, a co-borrower, or a secured loan

If your credit needs work but you need to apply for a loan now, you might lower your rate by adding a friend or relative with excellent credit as a cosigner or co-borrower to your personal loan. Should you fall behind on payments, the cosigner or co-borrower is responsible. They put their credit on the line too. This arrangement is potentially beneficial for you, but could risk your relationship with your loved one.

Another path forward is a secured personal loan. With a secured loan, you pledge collateral, such as your car, to back the loan. Because the lender can repossess the collateral if you default, there’s less risk for the lender, meaning you could get a lower rate. This is riskier for you, however, because you could lose your collateral if you miss payments.