Personal Loan Payment Calculator

How to use this personal loan payment calculator

If you’re looking to take out a personal loan but aren’t sure how much you can afford to borrow, this personal loan calculator can help you find the answer. Simply plug in the following information into our calculator to get started:

  • How much is your loan amount? Enter the loan amount you expect to borrow. This loan calculator allows you to see your monthly payment on a loan between $1,000 and $50,000.
  • What is your estimated interest rate? Ideally, you should enter your expected annual percentage rate, or APR. The APR takes your interest rate and fees, such as an origination fee, into account. Thus, it is a better measure of your loan cost.
  • What is your loan term? Choose the duration of time your loan issuer will give you to pay back the funds. This value is between three and seven years. A longer term translates to lower monthly payments but a higher overall loan cost.
    By plugging in the total amount of your loan, the rate and the amount of time in which you would pay back the debt, you’ll be able to instantly see your estimated monthly payment. This personal loan calculator will also reveal the total amount of money you will pay over the life of the loan. The total reflects the principal balance (the amount you are borrowing) plus interest charges (your cost for borrowing money).

How to read the amortization table

The amortization table breaks down your loan payment activity month by month for the duration of the loan. You can see that even though each monthly payment is the same, over time more of it goes toward paying off the principal and less goes toward interest.

Here’s more information about each of the columns in the amortization table:

  • Principal: This column reveals how much of your monthly payment has gone toward your loan’s principal balance.
  • Interest paid: This column shows how much of your monthly payment has gone toward interest charges. Each month, as you pay off more and more of your total debt, you’ll be paying off more of your principal and less in interest.
  • Total interest: You can see how much you have paid in interest since taking out your loan.
  • Balance: As you make payments, your remaining balance will decrease.

Amortization tables are useful tools that can help you determine the overall cost of borrowing, and make an educated decision between loan issuers that are offering different terms.

The importance of calculating loan costs

The APR offered on your personal loan will have a major impact on its affordability. That’s why it’s important to shop lenders. Two lenders may approve you for the same loan but offer different APRs that will affect your monthly payment and total loan costs.

Use the table below to see the average-offered APR for your credit score, according to LendingTree data:

660-67918.53%

Credit Score Range Average APR
720+ 7.63%
680-719 11.88%
640-659 26.15%
620-639 38.64%

To help illustrate the differences in your personal loan cost, let’s assume you wanted to apply for a $5,000 personal loan with a three-year term and received three loan offers with the following APRs: 7.63%, 11.88% and 18.53%. By plugging this information into our personal loan payment calculator, you would see the following information:

Cost estimates for a $5,000 loan repaid over 3 years
APR 7.63% 11.88% 18.53%
Monthly payment $155.83 $165.79 $182.09
Total interest paid $609.87 $968.26 $1,555.39
Total loan cost $5,609.87 $5,968.26 $6,555.39

As you can see, the difference between the cost of borrowing the loan with a 7.63% and 11.88% APR is significant; you’d save $358.39 in interest over the life of your loan by opting for the 7.63% rate over the 11.88% rate, and your monthly payment would be about $10 cheaper. Your savings would be much higher when compared with the third loan offer.

Where to get a personal loan

You can find personal loans at banks, credit unions or online lenders.

    • Banks might be the first place that comes to mind when applying for a personal loan. Banks can be a convenient option as they often have plenty of locations for in-person service, in addition to other loan and banking products. However, banks can have strict approval qualifications.
    • Credit unions may offer lower personal loan interest rates than banks, but you’ll need to be a member of the credit union. Member requirements vary but can be as simple as making a small donation to a specific nonprofit. Credit unions typically have local locations and the same variety in loan and banking products.
    • Online lenders have the most competitive personal loan rates, in part due to the fact that they have lower overhead costs without physical branches for customers. These lenders may only offer personal loans or a small number of loan products.
Word of caution: When looking for a personal loan — especially online — beware of predatory lenders. A predatory lender follows unfair or abusive practices. These may include exceptionally high APRs in the triple-digits and short repayment terms (such as a couple weeks). Predatory lenders may also hide information on fees, have a very easy approval process and practice pressure sales tactics.

Other ways to compare personal loan offers

APR isn’t the only way to compare loans. You may want to also consider a few other factors when comparing lenders and loan options:

  • Borrowing limits: Lenders can have higher or low borrowing limits. Make sure the lender you’re shopping offers the loan amount you need. A high minimum borrowing limit could lead you to borrow more than you planned, forcing you to pay interest on money you didn’t need.
  • Repayment terms: Some lenders may adjust the availability of repayment terms for your loan based on the amount you apply for. This could leave you with a shorter or longer repayment term than you’d prefer. A short repayment term means a higher monthly payment, while a longer one would result in higher overall interest costs.
  • Fees: Extra fees, such as an origination fee and prepayment penalty, can add to your cost to borrow. If you select a loan that has added fees, make sure you understand how they affect your loan affordability. The origination fee is baked into the loan APR, however.
  • Credit requirement: When applying for a loan, lenders approve favorable interest rates based on the borrower’s creditworthiness. Before applying, it’s wise to determine the minimum credit requirements for approval. Lenders will also consider your income when reviewing your application.

FAQs

A personal loan is a loan that is paid back in equal installments over a set period of time. Interest rates are fixed, meaning they don’t change. Although most personal loans are unsecured and do not require collateral, you can find secured personal loans, which can offer you larger loan amounts and lower rates.

A personal loan can be used for just about anything, including:

• Debt consolidation or refinancing
• Home improvement projects
• Wedding expenses
• Vacation costs
• Medical bills

Ideally, you should use a personal loan for something you really need, rather than to finance a shopping spree.

Because a personal loan is backed only by your promise to repay it, lenders look for factors like a healthy credit score, a low debt-to-income ratio and stable employment history. If you have all of the above, you could be deemed a relatively low risk, which would help you qualify for a personal loan.

If you don’t qualify the first time around, you could either work on improving your credit score before reapplying or looking for a reliable cosigner who has a better score.

Yes, you can qualify for a personal loan with bad credit. However, it might be harder to receive approval since lenders consider borrowers with bad credit to be of higher risk of missing payments. Even though some lenders will approve borrowers with bad credit, they may charge a higher origination fee and offer rates into the triple-digits, depending on your credit.

For a more affordable loan, you could seek out a cosigner or joint borrower. A secured loan, which requires collateral like your car or savings, can also be a good alternative to an unsecured personal loan. Just remember: If you get a secured loan and fall behind on payments, you risk losing your collateral.

You can find bad credit personal loans through online lenders, banks and credit unions. Since you’ll see less favorable terms from lenders, it’s even more important for you to compare personal loan interest rates, fees and discounts to ensure you’re receiving the most affordable personal loan for your situation.

Some mortgages, student loans and personal loans come with origination fees. This fee is a service charge the borrower pays the lender for processing the application, preparing any documentation, executing the loans and covering administrative costs. The fee may be added to the loan principal so that the borrower can pay it back over time.

Lenders may calculate the origination fee as a percentage of the loan or a flat fee. The fee can vary depending on the type of loan, the loan term, the loan’s size, and the lender. Additionally, the lender will factor in if you have good credit or have a cosigner. If you have less than ideal credit, you may end up paying a higher origination fee. The average origination fee ranges between 1% and 8% so, if you have poor credit, you may pay up to 8% of the total loan amount.

If you end up paying off your loan earlier than within the fixed term, you could be charged a prepayment penalty. Because your lender would be losing out on the interest fees they would have been getting if you kept making payments until the end of the term, they might charge you this penalty to offset this financial loss.

While this kind of charge is most common in mortgages and car loans, make sure you read your loan agreement carefully to see whether it could be applicable to your personal loan as well.

Using a personal loan may make sense if you can afford monthly payments for the entirety of the loan term, and it costs less than other types of credit. For example, if you have high-interest credit card debt with multiple revolving balances, you can use a personal loan to consolidate the debt, ideally at a lower interest rate. Consolidating debt with a personal loan may make your debt payments more manageable since you only have to worry about one payment and be able to pay off the loan faster.

A personal loan may also be a viable solution if you use it to make home improvements to your home that increase the property’s value. This way, you can avoid racking up a large sum of credit card debt or using your home as collateral.

On the other hand, personal loans are not the right solution if you are simply using the funds for unnecessary discretionary spending, such as taking a vacation. Good financial habits are vital to resisting the temptation of a lump sum of cash deposited into your bank account, as well as responsibly using the funds for which they were intended and paying them off on time every month.

Find out if a personal loan is right for you