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Personal Loan Calculator: How to Estimate Your Payments
Before taking out a personal loan, knowing your estimated monthly payment — and total cost — helps you decide how much to borrow and which term length to choose. Here's how to calculate it yourself.
The Basic Formula
Personal loans use amortized payments, meaning each monthly payment covers both principal and interest. The formula is:
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n – 1]
Where:
- P = loan principal (amount borrowed)
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of payments (term in months)
Example Calculation
For a $15,000 loan at 10% APR over 48 months:
- Monthly rate (r) = 0.10 / 12 = 0.00833
- Number of payments (n) = 48
- Monthly payment ≈ $380
- Total paid over 4 years ≈ $18,253
- Total interest ≈ $3,253
How Term Length Affects Cost
Using the same $15,000 at 10% APR:
- 24 months: $692/month, $1,604 total interest
- 36 months: $484/month, $2,424 total interest
- 48 months: $380/month, $3,253 total interest
- 60 months: $319/month, $4,121 total interest
The difference between a 2-year and 5-year term is over $2,500 in interest. Choose the shortest term you can comfortably afford.
What the Calculator Can't Tell You
Online calculators show estimates, but your actual payment depends on:
- The final APR after underwriting (not just the prequalified rate)
- Origination fees deducted from the loan amount
- Whether the rate is fixed or variable
- Any autopay discount the lender offers
Use a calculator as a starting point, then get prequalified for actual numbers. The prequalified offer is the real estimate — the calculator is just the warm-up.
This calculator gives you an estimate — actual payments may vary based on the lender's terms and your credit profile.
