About this calculator
Personal loans are simple amortized debts, but the choice of term changes the price far more than most borrowers expect. A five-year loan can cost less than half what a three-year loan costs despite a similar headline rate.
How it works
The payment is fixed for the whole term, so the interest comparison is straightforward: longer term means more payments and more total interest. This calculator exposes that total so you can compare offers on equal footing.
Frequently asked questions
How do I calculate a personal loan payment?
Use the amortization formula M = P · r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the amount borrowed, r is the monthly interest rate, and n is the number of monthly payments.
Is a longer personal loan term better?
A longer term lowers your monthly payment, which helps cash flow, but you pay more total interest. If you can afford the shorter term’s payment, it is almost always cheaper overall.
What is a good personal loan interest rate?
Rates depend on your credit score and the lender. In a competitive market, strong credit typically lands below 11% and average credit around 15 to 20%. Compare at least three lenders because offers vary widely.
Does taking a personal loan hurt my credit?
Taking one creates a hard inquiry, which has a small effect. More importantly, the new installment account and its utilization can affect your score over time. Making on-time payments on it helps.
Should I use a personal loan to pay off credit cards?
It can work when the card rate is much higher, since a lower-rate installment loan reduces the amount of interest accruing monthly. But you must not run the cards back up, or you will end up worse off.
Are there origination fees on personal loans?
Many lenders charge 1 to 10% of the loan amount, deducted at disbursement. A loan advertised at 10% with an 8% origination fee effectively costs about 19%. Factor the fee into the comparison.