Loan Calculator

Calculate monthly payments, total interest, and loan terms for personal loans and financing

Loan Calculator

Calculate monthly payments, total interest, and loan terms for various financing options

Loan Type

Loan Details

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Loan Tips

Shop Around

Compare rates from multiple lenders

Extra Payments

Even small extra payments save significant interest

Shorter Terms

Shorter terms mean less total interest

Check Fees

Factor in all fees when comparing loans

What is a Loan Calculator?

A loan calculator helps you determine monthly payments, total interest costs, and loan terms for various types of financing. It uses the loan amount, interest rate, and loan term to calculate your payment schedule and total cost of borrowing.

Key Components

Principal Amount:

The total amount borrowed

Original loan balance

Interest Rate:

Annual percentage rate charged

APR determines total cost

Loan Term:

Length of time to repay

Months or years

Loan Payment Formula

Monthly Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]

Where:

P = Principal loan amount

r = Monthly interest rate (annual rate ÷ 12)

n = Total number of payments (term × 12)

Types of Loans

Personal Loans:

  • Unsecured loans for various purposes
  • Fixed interest rates
  • Terms typically 12-84 months
  • Based on creditworthiness

Secured Loans:

  • Backed by collateral
  • Lower interest rates
  • Longer terms available
  • Risk of losing collateral

Interest Rate Types

Fixed Interest Rates:

  • Rate remains constant throughout loan
  • Predictable monthly payments
  • Higher initial rates
  • No rate fluctuation risk

Variable Interest Rates:

  • Rate can change over time
  • Lower initial rates
  • Payment amounts may vary
  • Subject to market conditions

How to Use the Loan Calculator

  1. Enter the loan amount you want to borrow
  2. Input the annual interest rate (APR)
  3. Select the loan term in months or years
  4. Add any additional fees or charges
  5. Click "Calculate" to see your payment breakdown
  6. Review the amortization schedule and total costs

Example Calculations

Short-Term Loan Example:

Loan Amount: $10,000

Interest Rate: 8% APR

Term: 36 months

Monthly Payment: $314

Total Interest: $1,304

Long-Term Loan Example:

Loan Amount: $10,000

Interest Rate: 8% APR

Term: 60 months

Monthly Payment: $203

Total Interest: $2,180

Factors Affecting Loan Rates

Borrower Factors:

  • Credit score and history
  • Income and employment stability
  • Debt-to-income ratio
  • Previous loan history
  • Loan purpose

Loan Factors:

  • Loan amount and term
  • Secured vs. unsecured
  • Market interest rates
  • Lender policies
  • Economic conditions

Loan Term Impact

Loan TermMonthly PaymentTotal InterestProsCons
12 monthsHigherLowerFast payoff, less interestHigher monthly payment
36 monthsModerateModerateBalanced payment and costLonger commitment
60 monthsLowerHigherLower monthly paymentMore total interest
84 monthsLowestHighestLowest monthly paymentMost expensive overall

Credit Score Impact

Excellent (720+):

  • Lowest interest rates
  • Best loan terms
  • Higher loan amounts
  • Faster approval

Good (690-719):

  • Competitive rates
  • Good loan terms
  • Reasonable amounts
  • Standard approval

Fair/Poor (Below 690):

  • Higher interest rates
  • Limited loan terms
  • Lower amounts
  • May need co-signer

Additional Costs to Consider

One-Time Costs:

  • Origination fees
  • Application fees
  • Processing fees
  • Documentation fees
  • Prepayment penalties

Ongoing Costs:

  • Late payment fees
  • Returned payment fees
  • Account maintenance fees
  • Insurance requirements
  • Collection costs (if default)

Tips for Getting the Best Loan

Before Applying:

  • Check your credit score
  • Compare multiple lenders
  • Calculate your budget
  • Gather required documents
  • Understand loan terms

During Application:

  • Be honest about information
  • Ask about all fees
  • Read terms carefully
  • Consider loan purpose
  • Plan for repayment

Common Mistakes to Avoid

  • Borrowing more than you can afford
  • Not comparing multiple lenders
  • Focusing only on monthly payment
  • Ignoring total interest costs
  • Not reading loan agreement
  • Missing payments or paying late
  • Not considering prepayment options
  • Taking loans for unnecessary expenses

When to Refinance

  • Interest rates have dropped significantly
  • Your credit score has improved
  • You want to change loan terms
  • You need to lower monthly payments
  • You want to pay off the loan faster
  • You're consolidating multiple loans

Loan Comparison Strategies

Compare These Factors:

  • Annual Percentage Rate (APR)
  • Monthly payment amount
  • Total interest paid
  • Loan term length
  • All fees and charges
  • Prepayment penalties

Use APR for Comparison:

  • Includes all loan costs
  • Standardized comparison
  • Required by law
  • Accounts for fees
  • True cost of borrowing

Applications

  • Personal Finance: Plan major purchases
  • Debt Consolidation: Compare consolidation options
  • Home Improvement: Calculate renovation costs
  • Education: Plan student loan payments
  • Business: Evaluate business financing
  • Investment: Compare loan vs. investment returns