Personal loan calculator: Estimate your monthly payments
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Updated 2:08 p.m. UTC Nov. 9, 2023
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A personal loan provides a lump sum of funding that you can use for almost any purpose, including debt consolidation, home improvement, medical bills and more. Since personal loans are installment loans, they require monthly payments over a set period of time — usually between one and seven years, depending on the lender.
Before borrowing money with a personal loan, it’s important to crunch the numbers and make sure you can afford the monthly payment. Our personal loan calculator will show how much you’ll pay both per month and over the life of your loan based on the amount of the loan, interest rate and repayment term.
How to use our personal loan calculator
Using our personal loan calculator is simple. To get started:
- Enter your loan amount.
- Enter your loan term (in months or years).
- Enter your interest rate.
- Hit “calculate.”
Then, the personal loan calculator will reveal your monthly payment as well as the total interest charges you’ll pay over the life of your loan. You can also expand your results to view your loan’s amortization schedule — this shows how much of your monthly payment goes toward your principal balance and interest over time.
Using this personal loan calculator can help you compare multiple loan offers with various rates and terms. It can also estimate your loan costs on different repayment terms. A shorter term, for instance, will have higher monthly payments but cost less in interest overall. A longer term, on the other hand, will have more affordable monthly bills but will also lead to higher interest charges in the long run.
How to apply for a personal loan
The steps to apply for a personal loan can vary somewhat by lender, but you’ll generally follow this process:
- Review your credit. Before starting the loan application process, it’s useful to know what your credit score is. Most lenders require good credit (usually 670 or higher), but some accept fair and poor credit scores. You should also review your credit report for any inaccuracies — if you find any, be sure to dispute them with the appropriate credit bureau to potentially boost your credit score. If your score is low and you don’t have an immediate need for a loan, you could take some time to improve your credit before applying.
- Determine your loan amount. The minimum and maximum amount you can borrow will vary by lender, with some lenders offering as much as $100,000. Our personal loan calculator can help you determine a loan amount you can afford — and avoid taking out too much.
- Prequalify with multiple lenders. Many lenders let you check your rates online with no obligation or impact on your credit score. By shopping around with several lenders, you can find the best loan offer for you.
- Submit a full application. If you find a loan offer with appealing rates and terms, your next step is completing an official application. Along with providing your personal details, you may have to upload verifying documentation, such as pay stubs or tax returns. At this point, the lender will typically run a hard credit inquiry, which could temporarily decrease your credit score by a few points.
- Receive your loan and begin repayment. If your loan application is approved, the lender will disburse your loan proceeds. You’ll then start paying your loan back on the agreed-upon repayment term. Consider setting up automatic payments so you don’t miss a bill.
Different types of personal loans
The majority of personal loans come with a fixed interest rate and are unsecured, meaning they don’t require collateral. However, those aren’t the only type of personal loans out there. Here are the different types of personal loans you might encounter:
- Fixed-rate loan: A fixed interest rate remains the same over the life of the loan, so you know exactly how much your monthly payment and long-term interest costs will be.
- Variable-rate loan: Although less common, some personal loans have variable interest rates that fluctuate with market conditions. If your rate is variable rather than fixed, your monthly payments and overall loan costs will be less predictable.
- Unsecured personal loan: Most personal loans are unsecured, meaning they don’t require collateral. Since these loans aren’t secured with an asset, lenders look closely at your credit and income when evaluating your application. Some lenders let you apply with a co-signer or joint applicant if you can’t meet underwriting requirements on your own.
- Secured personal loan: You might also come across secured personal loans. Unlike an unsecured loan, these are backed by collateral, such as a vehicle or savings account. Because there’s less risk to the lender, secured loans tend to have more lenient credit requirements than unsecured ones and may come with lower interest rates. However, you risk losing your collateral if you fall behind on payments.
- Debt consolidation loan: Some personal loans are designed specifically to help you consolidate debt. You can use the loan proceeds to pay off your old debts and have a new repayment term, ideally at a better interest rate. Some lenders will pay off your creditors directly while others send you the funds, which you can then use to pay off your debts.
Common uses for personal loans
Personal loans can be used for almost any legal purpose, such as:
- Debt consolidation
- Home renovations and repairs
- Medical bills
- Car repairs
- Emergency expenses
- Large purchases
- Moving expenses
- Wedding costs
“A personal loan can be used for a variety of purposes, from consolidating debt to financing a major purchase,” says financial advisor James Allen. “The interest rate on a personal loan is typically lower than the rate on a credit card, making it an attractive option for borrowers with [credit card debt].”
Keep in mind: Most lenders have a few restrictions on personal loan use. For instance, you typically can’t use a personal loan for investing, gambling, a down payment on a home or post-secondary education. Some lenders also don’t want you to use a personal loan on business or other commercial expenses.
Compare personal loan lenders
It can be difficult to qualify for an unsecured personal loan with bad credit since most lenders require good to excellent credit. However, each lender sets its own requirements, and some are more lenient than others.
“There are some lenders that specialize in bad credit loans, but the interest rates tend to be higher,” says Allen. “It’s important to compare offers from multiple lenders to ensure you’re getting the best deal possible.”
But if you’re having trouble qualifying for an unsecured loan on your own, you’re not out of options. You could try applying with a creditworthy co-signer, who can help you get approved and access better interest rates.
Alternatively, you can opt for a secured loan that requires collateral. Secured loans typically have lower credit score requirements than unsecured loans. The downside, though, is that you risk losing your collateral if you fall behind on payments.
The amount of time it takes to get a personal loan will vary by lender. Some lenders offer fast personal loans with funding the same day as approval, while others could take a few business days to process your application and release the funds.
If you’re using a personal loan for debt consolidation, some lenders will send the loan funds directly to your creditors on your behalf. In this case, it might take a couple of weeks for the funds to clear and your old debt accounts to close.
The question of whether you should get a personal loan all comes down to your individual circumstances. A personal loan can make sense for certain purposes, such as debt consolidation or home improvement. However, it might not be a good idea to take on debt to fund a vacation or other non-essential expense.
Before taking out a personal loan, make sure you can afford the monthly payments. Missing payments can damage your credit score and lead to late fees and other consequences.
Additionally, if you only qualify for higher interest rates, consider whether getting a loan is worth the cost in the long run. You might take some time to improve your credit before applying so you can qualify for a lower rate.
Yes, a personal loan calculator can calculate your monthly payments based on your loan amount, interest rate and repayment term. It also reveals how much interest you’ll pay over the life of your loan.
A personal loan calculator accurately calculates your monthly payments based on your loan amount, interest rate and repayment term. However, your costs might be greater if your loan comes with additional fees, such as origination or late fees. Loan costs and monthly payments can also fluctuate if you have a variable interest rate that changes over time, instead of the typical fixed interest rate most personal loans come with.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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