Personal Loan Calculator: Estimate Personal Loan

A Personal Loan Calculator is an online tool that can help you work out how much you will have to pay per month on your loan, how much interest you’ll pay in total and the total amount you’ll pay back. You may take out a personal loan to fund home improvements, medical costs, debt consolidation, large purchases or unexpected emergencies.

In the US, personal loans are typically offered by banks, credit unions and online lenders. The majority of personal loans are unsecured so you won’t need to put up collateral like a property or car. Lenders will usually look at your credit score, income, current debt and repayment history to decide if they will approve your application and what rate of interest to charge.

Our Personal Loan Calculator helps you get an idea of how much you’ll pay to borrow money. Simply enter how much you’d like to borrow, interest rate and the length of the loan to see an estimate of how much you’ll have to pay each month. You can also see how much interest you’ll pay in total and how much you’ll pay back in total.

For example, borrowing $10,000 at an interest rate of 10% for 3 years will be charged differently to 5 years.

This tool can help you compare loans, see how much you’ll pay back and see if you can afford the monthly repayments. Keep in mind that this will only give you an estimate.

How to Use a Personal Loan Calculator

To use a Personal Loan Calculator follow these easy steps.

Enter how much you want to borrow. Enter the loan amount in USD e.g. $10,000 for a personal loan of $10,000.

Add in the interest rate. Enter the annual percentage rate (APR) or interest rate your lender has given you. You can use 10% as an estimate.

Enter the loan length. Enter how long you want to repay your loan in either months or years. Personal loans are often between 2-7 years but lenders can offer shorter or longer terms.

Click calculate. This will give an estimate of how much you’ll pay each month.

See the total interest. This will show how much interest you’ll pay in total.

See the total repayment. This will show you how much you’ll pay back in total.

To get the most out of this tool try entering different loan amounts, interest rates and lengths so you can see which option will be most affordable.

Personal Loan Calculator Formula

A Personal Loan Calculator typically uses the formula for calculating monthly payments on an amortising loan.

Monthly Payment

M=P× r(1+r)n (1+r)n-1

Where,

M = Monthly payment

P = Principal loan amount

r = Monthly interest rate (annual interest rate divided by 12)

n = Total number of monthly payments

If your annual interest rate is 10%, then your monthly interest rate would be approximately 0.008333 (or 0.8333%).

Total repayment

Total repayment = Monthly payment x Number of payments.

Total interest

Total interest = Total repayment - Principal loan amount.

It assumes that you’ll have a fixed interest rate, fixed monthly payment and your loan will be fully amortised.

Example Calculation

Let’s say you want to borrow $10,000 for a personal loan. Your lender offers an annual interest rate of 10% and you’re going to repay it over 3 years.

You would have:

Loan Information Amount

Loan amount $10,000

Annual interest rate 10%

Loan length 36 months

Estimated monthly payment $322.67

Total repayment $11,616.12

Total interest $1,616.12

This means that your monthly payment will be approximately $322.67, assuming a fixed 10% annual interest rate and monthly amortization. The total repayment is approximately $11,616.12. Of this, $1,616.12 will go towards interest.

Your lender may have slightly different calculations due to rounding, the dates your payments are made, any fees and the APR.

What does my Personal Loan Calculator tell me?

Your Personal Loan Calculator will tell you several things to help you see if the loan is affordable.

• Loan amount – the amount you want to borrow before adding interest and fees.
• Monthly payment – an estimate of how much you’ll have to pay each month.
• Total interest – an estimate of how much you’ll pay in interest.
• Total repayment – how much you’ll pay in total.
• Loan length – how long you have to repay.

While a lower monthly payment may seem cheaper, increasing the loan length will generally reduce your monthly payment but increase the total interest you pay.

A longer term (5 years) may be more manageable but you could pay more in interest. Try to compare both the monthly payment and total repayment.

Factors to Consider

There are several factors that will affect your personal loan.

Loan amount

The more you want to borrow the more you’ll pay each month. The interest rate and loan length will stay the same.

Annual interest rate & APR

The interest rate will determine how much you’ll pay to borrow the principal. Your APR may include some fees from the lender so it can be a good way to compare loans. Make sure you know if your calculator is using the interest rate or APR.

Loan length

A longer loan will mean you’re paying over more months so your monthly payments will be lower. However, you may pay more in interest.

Credit score

In the US, lenders will often look at your credit score and history to determine your creditworthiness. If you have a strong credit profile you may be able to get lower rates. If you have a low credit score you may be charged higher rates or have fewer loan options.

Income & Debt

Lenders may look at your income, job and debt to income ratio.

Fees

There may be fees to pay such as origination fees and late fees. Some lenders will take origination fees from your loan so you may not get the full amount.

Advantages & Uses

There are several advantages to using a Personal Loan Calculator.

• Plan your budget – see how much you’ll pay each month.
• Compare loans – see how different interest rates, loan amounts and lengths affect your payment.
• Interest – see how much more you’ll pay.
• Debt consolidation – see how much you’d pay if you consolidate your eligible high interest debt.
• Unexpected expenses – see if you can afford to borrow.
• Shorter or longer loan lengths – compare which is more affordable.
• Make better financial decisions – see what you’ll pay to help you compare loans and ensure you aren’t borrowing more than you need.

Consider what you regularly spend, save, pay towards debt and other commitments. Even if you can afford to pay, it may cause issues if you have other household costs.

Accuracy, Assumptions & Limitations

A Personal Loan Calculator will give you a mathematical estimate based on your input. It will be accurate if you’ve entered the correct loan amount, interest rate and loan length.

Most standard calculators will assume that you’ll have a fixed interest rate, fixed monthly payments and will be paying regularly until the loan is paid off. It may not take into account the lender’s payment schedule, origination fees, insurance (if you choose to take it out), late fees etc.

The interest rate and APR may not be the same. The interest rate will normally be the cost of borrowing the principal. The APR may include some fees. Using the wrong number can cause you to get a different estimate.

This tool will not guarantee you’ll get approved for a loan, determine your creditworthiness or tell you what interest rate you’ll be offered. Your final terms will depend on your lender.

Always check the loan terms, APR, fees, monthly payment and total repayment. When comparing loans try to keep the loan amount and length the same.

FAQs

1. What is a Personal Loan Calculator?

A Personal Loan Calculator is an online tool that can help you work out how much you’ll pay each month on your loan, how much interest and how much you’ll pay back in total. You can enter how much you want to borrow, interest rate and length of loan.

2. How much will I pay monthly for a $10,000 personal loan?

This will depend on your interest rate and loan length. For example, you’d pay $10,000 loan at a fixed 10% annual interest rate over 36 months has an estimated monthly payment of approximately $322.67 (excluding any fees).

3. What credit score do I need for a personal loan in the USA?

There is no one answer to this as it will depend on the bank, credit union and online lender. Your credit history, income, debt and other details may affect your approval.

4. Will a longer loan length reduce my monthly payment?

Yes, generally. The longer you pay back your loan the more months you’ll pay so your payments will be lower. However, this can mean you’ll pay more in interest.

5. What is the difference between an interest rate and APR?

The interest rate shows how much you’ll pay to borrow the principal. The APR will generally include the interest rate and some fees. Looking at the APR can help you compare the overall cost of different loans.

6. Does the Personal Loan Calculator include any fees?

Not necessarily. A basic calculator will just give you an estimate of how much you’ll pay in principal and interest. You may need to consider origination fees.

7. Can I repay my personal loan early?

Many personal loans can be paid back early. This will depend on your lender. Check if there is a prepayment fee and if extra payments go directly towards your principal. You may pay less in interest.