How to Use Our Personal Loan Calculator
To calculate your estimated payment, you only need three simple pieces of information. Lenders use these same factors to determine your payment plan.
Loan Amount: Enter the total sum of money you need to borrow.
Annual Interest Rate (%): This is the yearly cost of borrowing, shown as a percentage. The best way to find this is to get pre-qualified with a few lenders, which you can often do without impacting your credit score.
Loan Term (in years): The amount of time you have to pay back the loan. Common personal loan terms are 3, 5, or 7 years. A shorter term means higher monthly payments but less interest paid overall.
Understanding Your Results
The calculator provides a complete financial summary of your potential loan. It’s important to look beyond just the monthly payment to understand the loan’s long-term impact on your finances.
Your Estimated Monthly Payment: This is the fixed amount you will owe the lender each month. Because most personal loans have a fixed rate, this payment will not change for the entire loan term.
Your monthly payment is composed of two parts:
Principal: The portion of your payment that pays down the original amount you borrowed.
Interest: The portion of your payment that is the lender’s fee for loaning you the money.
The calculator also provides these critical totals:
Total Interest Paid: This is the total profit the lender makes from your loan and the real cost of borrowing for you. Comparing this number between different loan offers is key to saving money.
Total Repayment: This is the sum of the original loan amount plus all the interest you will pay over the life of the loan.
Example Loan Breakdown
Imagine you take out a $15,000 personal loan for debt consolidation with an 11% interest rate and a 5-year (60 month) repayment term.
How Your Payments Change Over Time (Amortization)
While your monthly payment is fixed, the breakdown between principal and interest shifts with every payment you make.
(A simple pie chart or bar chart would be embedded here showing the first payment is mostly interest and the last payment is mostly principal.)
At the Beginning: A large portion of your payment goes toward interest.
At the End: As your balance shrinks, less interest accrues, and a large portion of your payment goes toward your principal.
Frequently Asked Questions
What is a good credit score for a personal loan?
Your credit score is the single most important factor in determining your interest rate. Lenders view a higher score as less risky. Here are the general FICO score ranges and what they mean for you as of July 2025:
How can I get a personal loan with a low interest rate?
Securing a low interest rate can save you thousands of dollars. Here are four actionable steps:
Improve Your Credit Score: Before applying, pay all bills on time and try to lower your credit card balances to reduce your credit utilization ratio.
Shop Around: Don’t just accept the first offer. Get pre-qualified rates from at least three different lenders: a traditional bank, a credit union (which often have lower rates for members), and an online lender.
Choose a Shorter Loan Term: As our calculator shows, a shorter term (like 3 years vs. 5 years) results in less total interest paid. If you can afford the higher monthly payment, it’s a great way to save.
Consider a Co-signer: If your credit isn’t perfect, applying with a co-signer who has excellent credit can help you qualify for a much lower rate.
What is the difference between a secured and an unsecured personal loan?
This is a key distinction that affects who can qualify and what is at risk.
Unsecured Personal Loans: These are the most common type. They are not backed by any collateral. The lender approves you based solely on your creditworthiness (credit score, income, debt). If you fail to pay, the lender’s recourse is to report it to credit bureaus and take you to court.
Secured Personal Loans: These loans are backed by an asset you own, called collateral. This could be your car, a savings account, or other valuable property. Because the lender can seize the collateral if you default, these loans are less risky for them and often come with lower interest rates. They are an option for borrowers with fair or poor credit.
Does checking my personal loan rate affect my credit score?
This is a common fear, but you can shop for rates without worry. Lenders use two types of credit inquiries:
Soft Inquiry (or “Soft Pull”): This happens when you check for “pre-qualified” or “pre-approved” rates. It does not affect your credit score at all. You can do this with as many lenders as you want.
Hard Inquiry (or “Hard Pull”): This happens only when you formally submit a full loan application after choosing a lender. A single hard inquiry might cause a small, temporary dip in your score (usually less than 5 points).
Strategy: Get multiple soft-pull pre-qualifications to find the best offer, then only do one hard-pull application with the lender you choose.
Are there good alternatives to a personal loan?
Yes, depending on your situation, another option might be better.
0% APR Intro Credit Card: If you have excellent credit and need to borrow a smaller amount ($5,000 or less) that you can pay back within 12-21 months, a credit card with a 0% introductory APR on purchases or balance transfers can be cheaper than a loan. The key is paying it off before the high regular interest rate kicks in.
Home Equity Line of Credit (HELOC): If you are a homeowner with significant equity, a HELOC may offer a much lower interest rate than a personal loan. However, this is a secured loan that uses your house as collateral, which is a significant risk to consider.
Take the Next Step in Your Financial Plan
Now that you’ve estimated your personal loan payment, see how it fits into your overall spending with our Budget Calculator. If you’re borrowing to handle high-interest credit cards, our Debt Consolidation Calculator can show you how much you could save.
