How to use this loan calculator
Enter the amount you plan to borrow, the annual interest rate and the term, then choose whether the term is in years or months. The calculator assumes a fixed rate and equal monthly payments — how personal loans, debt consolidation loans, home improvement loans, most student loans and loans between family members are usually set up. For schedules up to 36 months you get every payment; longer loans are summarized by year.
The loan payment formula
M = P × r ÷ (1 − (1 + r)−n)
P is the amount borrowed, r is the monthly rate (annual rate ÷ 12) and n is the number of monthly payments. At a 0% rate the formula simplifies to M = P ÷ n. Total interest is simply M × n − P.
Worked example
You borrow $15,000 at 10% for 5 years. The monthly rate is 0.10 ÷ 12 ≈ 0.008333 and there are 60 payments, so:
- Monthly payment: $318.71
- Total paid over 60 months: $19,122.34
- Total interest: $4,122.34, or 27% on top of what you borrowed
How the term changes the cost
A longer term lowers the payment but keeps you paying interest for longer. The same $15,000 at 10%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 2 years | $692.17 | $1,612 |
| 3 years | $484.01 | $2,424 |
| 4 years | $380.44 | $3,261 |
| 5 years | $318.71 | $4,122 |
| 6 years | $277.89 | $5,008 |
Going from 3 to 5 years cuts the payment by $165.30 but adds $1,698 in interest. Lenders often charge higher rates on longer terms too, which widens the gap.
Interest rate vs APR and origination fees
Many personal loans charge an origination fee that is subtracted from the money you receive. Borrow $15,000 with a 5% fee and $750 is withheld, so $14,250 reaches your account — but you repay the full $15,000 plus interest. The APR folds fees into a yearly rate, which makes it the better number for comparing offers. To calculate the payment itself, use the loan’s interest rate and the full loan amount, as this calculator does. If you need a specific amount in hand, borrow enough to cover the fee.
Tips before you borrow
- Prequalify with several lenders. Many show your likely rate after a soft credit check, which does not affect your score.
- Compare total cost, not just the payment. The lowest payment is often the most expensive loan.
- Ask about autopay discounts and whether there is a prepayment penalty.
- Check for a fixed rate. This calculator assumes the rate never changes; a variable-rate loan’s payment can rise.
- Weigh the alternatives. If you are consolidating card debt, the credit card payoff calculator shows what you would pay by keeping the cards and paying them down directly.
Results are estimates. Your lender’s disclosure shows the exact payment, fees and APR before you sign.
Frequently asked questions
How is a monthly loan payment calculated?
With the amortization formula M = P × r ÷ (1 − (1 + r)−n), using the monthly rate r and the number of payments n. Each payment covers that month’s interest, and the rest reduces the balance.
Should I choose a shorter or longer term?
Choose the shortest term whose payment fits comfortably in your budget. Shorter terms cost far less interest; longer terms lower the payment but cost more overall.
Does paying off a loan early save money?
On most installment loans, yes — interest is charged on the remaining balance, so paying it down early stops that interest. A few loans charge a prepayment penalty or use precomputed interest, so check your agreement first.
What is a good interest rate on a personal loan?
It depends heavily on your credit score, income and existing debt, and on market rates at the time. The practical test is to compare several prequalified offers by APR and total cost.
Can I calculate a loan in months instead of years?
Yes. Switch “Term in” to Months and enter the number of payments, such as 18 or 30. Terms of 36 months or less show a full month-by-month schedule.
Last updated: October 8, 2026