What is a personal loan payment calculator?
If you’re looking to take out a personal loan but aren’t sure how much you could be eligible for, this personal loan payment calculator can help you find the answer.
By plugging in the total amount of your loan, the interest rate and the amount of time in which you would have to pay it back, you’ll be able to instantly see what your fixed monthly loan payments would be.
This calculator will also reveal the total amount of money you will pay over the life of the loan. This total amount reflects the principal balance (the amount you are borrowing) plus interest charges (your cost for borrowing money).
How to use this calculator
As you enter the below information, this calculator will reveal your monthly payment and total cost of repayment. Note that your total cost of repayment may vary if, for example, you fall behind on payments.
- How much is your loan amount? The calculator allows you to see your monthly payment on a loan between $1,000 and $50,000. Enter the loan amount you expect to borrow.
- What is your estimated interest rate? Choose the estimated interest rate between 6% and 35% that most closely fits with what you will be charged to borrow the funds. If you have a healthy credit score, you might be able to negotiate a lower interest rate with your bank or loan issuer — that’s because lenders see you as a lower risk of defaulting on the loan. With personal loans, your interest rate will be fixed for the entire duration.
- What is your loan term? Choose the term, or duration of time your loan issuer will give you to pay back the funds. This value is between three and seven years. A shorter loan terms will mean you’ll get out of debt sooner, but you’ll have higher monthly payments. A longer loan term will mean lower monthly payment, but a higher overall cost of borrowing.
How to read the amortization table
If you want to dig into the details of your repayment, you can review its amortization table after inputting information about your loan.
Think of an amortization table as your debt schedule at-a-glance. It visually breaks down your loan payment activity in numbers, month by month for the entire duration of the loan. You can see that even though each monthly payment is the same, over time more of it goes towards paying off the principal and less towards interest.
Here is more information about each of the columns in the amortization table:
- Principal: This columns reveals how much of your monthly payment has gone toward your loan’s principal balance.
- Interest paid: This column shows how much of your monthly payment has gone toward interest charges. Each month, as you pay off more and more of your total debt, you’ll be paying off more of your principal and less in interest.
- Total interest: You can see how much you have paid in interest since taking out your loan.
- Balance: As you make payments, your remaining balance will decrease.
Amortization tables are useful tools that can help you determine the overall cost of borrowing, and make an educated decision between loan issuers that are offering different terms.
FAQs: Personal loan payment calculator
What is a personal loan?
A personal loan is also known as an unsecured loan, because it’s not backed by anything of value that can be repossessed by the lender if you don’t pay off your debt. Personal loans are paid off at a fixed interest rate within a set period of time and can be used to fund a variety of personal expenses or to pay back other debt at higher interest rates.
What can a personal loan be used for?
Personal loans are referred to as “personal” because they are used to fund a range of expenses, from medical bills and home renovations to weddings or consolidating other debts. Ideally, you should use a personal loan for something you really need, rather than to finance a shopping spree.
How do I qualify for a personal loan?
Because a personal loan is backed only by your promise to repay it, lenders look for factors like a healthy credit score, a low debt-to-income ratio and stable employment history. If you have all of the above, you could be deemed a relatively low risk, which would help you qualify for a personal loan.
If you don’t qualify the first time around, you could either work on improving your credit score over time or look for a reliable co-signer who has a better score.
Can I get a personal loan with bad credit?
You could still qualify for a personal loan with bad credit — however, it will cost you more over the long term, as lenders will charge you higher interest fees. If taking the time to boost your credit score isn’t an option, consider finding a co-signer for your loan application to access better terms and rates.
How do I find the best lender for me?
Comparison shop lenders — just as you’d visit multiple dealerships when buying a car, you should also speak with different lenders to find the one that’s best for you.
You can apply for preapproval, too. Doing so won’t affect your credit score and it can reveal what kinds of terms you may qualify for.
Read the fine print before choosing a loan, too. A lower interest rate may not be the only thing you consider when shopping lenders — for example, watch out for hidden application and origination fees.
What is a prepayment penalty?
If you end up paying off your loan earlier than within the fixed term, you could be charged a prepayment penalty. Because your lender would be losing out on the interest fees they would have been getting if you kept making payments until the end of the term, they might charge you this penalty to offset this financial loss.
While this kind of charge is most common in mortgages and car loans, make sure you read your loan agreement carefully to see whether it could be applicable to your personal loan as well.
Is a personal loan right for me?
While our latest findings on personal loans show this financial product is an increasingly popular way to consolidate debt, fund major purchases and even boost credit scores over time, they may not be the best choice for everyone. If interest rates are too high to be favorable, or you only need to borrow a small amount of money, you might want to consider other borrowing options, like a low-interest credit card.
Good financial habits are key to resisting the temptation of a lump sum of cash deposited into your bank account, as well as responsibly using the funds for which they were intended and paying them off on time every month.