Personal Loan Calculator

Lenders use the amortization formula: M = P × [r(1+r)^n] / [(1+r)^n – 1], where M is the monthly payment, P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of payments. For a $20,000 loan at 9% APR over 5 years, r is 0.0075 and n is 60. Plugging in: M = 20,000 × [0.0075(1.0075)^60] / [(1.0075)^60 – 1] = $415.17. Over 60 months, you pay $24,910 total, meaning $4,910 goes to interest. If you extend the term to 7 years (84 months), the payment drops to $322.06, but total interest jumps to $7,048. That's $2,138 more in interest for a $93 lower monthly payment. Use this calculator to test your own numbers, then compare the result against our loan calculator to see how different terms stack up.

As of 2024, borrowers with credit scores above 720 typically qualify for rates between 6% and 12%. Scores between 640 and 719 usually land in the 12% to 20% range, while scores below 640 often see rates of 20% to 36%. For example, a $15,000 loan over 3 years at 8% costs $2,000 in total interest, while the same loan at 18% costs $4,500 — a $2,500 difference. Credit unions often beat banks for personal loans; some advertise rates as low as 5.99% for excellent credit. If you're offered 22% but have a 700 credit score, shop around — you can likely find 12% or better. Even a 5% rate reduction on a $15,000 3-year loan saves about $1,200. Check your rate with at least three lenders within a 14-day window to minimize credit score impact. For auto loans, which often have lower rates, try our auto loan calculator to compare.

A 3-year term saves interest but costs more per month. On a $20,000 loan at 10%, a 3-year term means a $645 monthly payment and $3,230 in total interest. A 5-year term drops the payment to $425 but raises total interest to $5,500 — $2,270 more. The break-even question is whether that extra $220 per month is affordable. If you can comfortably pay $645, the 3-year loan is cheaper overall. If the $645 strains your budget and risks missed payments, the 5-year loan is safer. Missed payments trigger late fees (often $25 to $40) and can damage your credit score by 50 to 100 points. A middle option is a 4-year term: $507 per month and $4,340 in interest. Run all three scenarios through this calculator and compare the total paid figures side by side. If you're also considering a mortgage, our mortgage calculator can show how a shorter term affects home loan costs.

An origination fee is a one-time charge, typically 1% to 8% of the loan amount, deducted from your funds at closing. On a $20,000 loan with a 5% origination fee, you receive $19,000 but still owe $20,000 plus interest. That effectively raises your APR by about 1.5 to 2 percentage points. For example, a loan advertised at 10% with a 5% fee has a true APR closer to 11.8%. Some lenders charge no origination fee but offer a slightly higher interest rate; others charge the fee and a lower rate. Compare the APR, not just the interest rate, because the APR includes fees. If Lender A offers 10% with a 5% fee and Lender B offers 11% with no fee on a $20,000 5-year loan, Lender A costs $25,500 total (including the $1,000 fee) while Lender B costs $26,100 — so Lender A is slightly cheaper. Always ask for the APR in writing. Use this calculator with the APR to see the real monthly payment and total cost.

Most personal loans have no prepayment penalty, so you can pay extra or pay off the balance early without a fee. Doing so saves interest because interest is calculated on the remaining balance. Suppose you have a $20,000 loan at 9% over 5 years with a $415 monthly payment. If you pay an extra $100 per month, you'll finish the loan in about 43 months instead of 60 and save roughly $1,800 in interest. If you pay it off in a lump sum after 24 months, you'll save about $2,900 in remaining interest. Check your loan agreement for a prepayment penalty — some lenders charge 1% to 2% of the remaining balance if you pay off within the first year or two. Even with a 2% penalty on a $15,000 balance ($300), you'd still save thousands in interest. Before paying off a low-rate loan early, compare the rate to what you could earn investing that money. If your loan is at 6% and a high-yield savings account pays 5%, the difference is small. For mortgage prepayment, use our mortgage calculator to see potential savings.

Most lenders require a minimum credit score of 600 to 620, but the best rates go to borrowers with scores of 720 or higher. With a 760 score, you might qualify for a 6.99% rate on a $25,000 5-year loan, costing $2,900 in total interest. With a 640 score, the same loan might carry a 19.99% rate, costing $14,800 in interest — a difference of $11,900. Some online lenders specialize in fair-credit loans with scores as low as 560, but rates often exceed 30%. If your score is below 650, consider improving it before applying: paying down credit card balances below 30% utilization can raise your score by 20 to 50 points in a few months. A 50-point increase could drop your rate from 20% to 15%, saving $3,500 on a $25,000 5-year loan. If you need funds urgently, a co-signer with excellent credit can help you qualify for a lower rate. For auto loans, which often have different credit requirements, try our auto loan calculator.