Loan Calculator
Calculate monthly payments for any personal or auto loan.
Formula
M = P[r(1+r)^n] / [(1+r)^n – 1]
Example
A $20,000 loan at 5% for 60 months = $377/month.
Understanding the Loan
Personal loans, auto loans, and other consumer loans all run on the same amortization mathematics as mortgages - but the rates are typically higher (8-25% APR for personal loans vs 5-7% for mortgages) and the time horizons shorter (2-7 years vs 15-30). The loan calculator surfaces what those parameter shifts cost.
How it actually works
Calculate monthly payments for any personal or auto loan.
The formula is straightforward arithmetic once the inputs are correct; the value of the calculator is in handling the algebraic manipulation reliably and removing transcription errors. Plug in your specific inputs above and the result appears as you type, so you can immediately see how each variable affects the answer.
What the numbers really say
A $20,000 personal loan at 11% over 5 years costs $26,096 total - $6,096 in interest. The same loan at 15% APR (common for fair credit): $28,560 total, $8,560 in interest. Credit score swings of 50-100 points typically translate to 3-5 percentage points of rate, which on a 5-year personal loan is $1,500-3,000 lifetime difference.
The deeper context most users miss
Beyond the basic amortization math, what makes loan calculators most powerful is comparing scenarios. The same principal, term, and credit profile evaluated across three different lenders typically produces APRs that vary 0.5-2 percentage points - which on a 5-year personal loan or a 30-year mortgage translates into thousands to hundreds of thousands of dollars in lifetime interest. The decision to shop rates aggressively before signing usually represents the single highest-return hour of work most borrowers will do for years. Banks, credit unions, and online lenders price differently because they have different funding costs, risk models, and customer acquisition strategies; none consistently offers the best rate.
What people get wrong
- Comparing monthly payment instead of total cost. A 7-year loan has lower monthly payments than a 4-year loan but costs significantly more in lifetime interest. Total paid is the better comparison.
- Not shopping rates. Personal loan rates from different lenders for the same borrower can vary 5-10 percentage points. Shop 3-5 lenders before signing.
- Skipping origination fees. Some lenders charge 1-8% origination fee, which is essentially interest paid upfront. Compare APR (which includes fees) across lenders, not the rate alone.
- Borrowing for depreciating assets. A $30,000 personal loan to buy a car that depreciates 20% the first year leaves you upside-down. Auto loans (secured by the vehicle) have better rates and align with the asset.
When this calculator helps most
The loan calculator is most useful when you are making a real decision - comparing options, sizing a commitment, sanity-checking a quote, or planning ahead. The output is precise to your inputs; the inputs themselves are the place to slow down. Spend extra time on the assumptions you are making about rate, term, timing, or context-specific variables - those swing the answer far more than the formula's arithmetic does. A 5% change in the input often produces a 10-20% change in the output, which means small input errors compound into large output errors.
Where the math comes from
The Truth in Lending Act (TILA) requires standardized APR disclosure. The CFPB publishes consumer loan data. NerdWallet, Bankrate, and Credit Karma maintain current rate comparison data. Federal Reserve consumer credit data tracks aggregate trends.
Questions and answers
Should I take a 3-year or 5-year loan?
Shorter term saves total interest but requires higher monthly payment. If you can comfortably afford the higher payment, shorter wins. Some lenders price longer terms at higher rates, increasing the gap.
What is the difference between secured and unsecured?
Secured loans (auto, home) are backed by collateral; if you default, the lender takes the asset. Unsecured loans (personal) have no collateral, hence higher rates. Secured loans typically offer 3-5 percentage points lower.
How does credit score affect the rate?
Significantly. Excellent credit (740+) typically qualifies for the best advertised rates; fair credit (620-680) might pay 5-10 percentage points more for the same loan. The lifetime cost difference can be substantial.
Can I pay off the loan early?
Most personal loans allow early payoff without penalty (federal law for mortgages limits penalties; personal loans vary). Read the contract for prepayment terms.
Will a loan inquiry hurt my credit?
Pre-qualification typically uses a soft inquiry (no impact). The hard inquiry happens on application. Multiple inquiries within 14-45 days for the same purpose typically count as one for scoring.
Sources & References
Authoritative references consulted in building this calculator and educational content. These are primary sources — check directly for the most current figures.
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