Personal Loan Calculator

If you’re considering taking out a personal loan and want to know the monthly payments you can expect, our personal loan calculator can help.

A loan payment calculator like this can give you a clear estimate of the financial commitment you’ll be making with a personal loan. This can help you make more informed decisions about your money and stay within your budget.

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How To Use Our Personal Loan Calculator

Our personal loan calculator is straightforward and easy to use. Here’s a brief rundown:

1. Enter your loan amount: Get started by entering the loan amount you’re considering. Most of the best personal loans range from $1,000 to $50,000. However, some lenders offer them in amounts as low as $250 or as high as $500,000. 
2. Enter your interest rate: While it’s usually impossible to know the exact interest rate you’ll qualify for, you can enter a likely range based on your credit score. Current personal loan rates are around 5.99% to 35.99% annual percentage rate (APR). The national average rate stood at 12.17% in August, according to the latest data from the Federal Reserve. That’s a good place to start, but with a very good credit score range (740 and up), you can expect a lower interest rate. 
3. Choose your repayment term: Personal loan repayment terms vary between lenders, but typical ranges are one to seven years. Longer terms are available for most large loans. A longer term will mean a lower monthly payment, but you’ll pay more in interest over the life of the loan. Shorter-term loans have higher monthly payments, but you’ll save money overall. This calculator can help you find the term that works best for your budget.

The main figure you’ll see in the results will be your estimated monthly payment amount. As you can see, these payments will vary based on the loan amount, interest rate and repayment term. 

To get approved for a personal loan, lenders usually take a broad look at your entire financial situation, rather than just your credit score. 

One of the other metrics a lender considers is your debt-to-income ratio (DTI). This calculates the amount of monthly income going toward the debt payments you already have, such as credit cards and car loans. 

A good DTI is considered 43% and below, but most personal lenders like to see this number at 36% or less. To calculate this yourself, simply add up all your monthly bills and divide that total by your gross monthly income. 

For example, let’s say you have monthly debt payments totaling $2,750 and a total gross monthly income of $6,500. Your DTI ratio would be 42.3% (2,750/6,500 = .0423).

Next Steps After Estimating Payments

If you’ve decided a personal loan is right for you, it’s time to take the next steps. 

1. Research: First, you can identify a few different personal loan companies that fit your financial situation. Once you’ve found a few, read their loan terms carefully. Each institution has its own rates, loan amounts and terms, so you’ll want to find one that fits your needs. 
2. Prequalify: While our loan calculator provides detailed estimates of personal loan terms, the actual cost of the loan will vary among lenders. Most lenders offer the option to quickly prequalify for a loan on their websites without taking a hit to your credit score. If that option is available from the lenders you chose, do this before submitting a full application – and use the numbers you receive to compare offers. It’s important to either prequalify or apply with several different lenders to properly weigh all your loan options. 
3. Evaluate: Once you’re able to see some actual quotes from personal loan lenders, you should evaluate your financial situation based on these terms. Can you afford the monthly payments? Are you able to secure favorable enough terms for the loan to be worth the commitment? 
4. Apply: Once you’ve made your decision on the best lender, you will need to fill out a full loan application. In most cases, you’ll be asked to submit further documentation, such as pay stubs, personal identification or bank statements. 
5. Review: Once again, read the loan terms carefully before signing the final agreement. Ask your lender to clear up anything that is unclear.
6. Accept: If you’re comfortable with the loan terms, you can accept your offer. The lender will then disburse the funds according to its schedule.
7. Repay: Your first personal loan payment will probably be due in about 30 days from the date of disbursement. Prepare your budget ahead of time to make room for the new debt. 

Comparing Personal Loan Offers

The key to finding the best loan for your needs is to compare personalized quotes from various lenders. This allows you to see your actual projected payments and terms based on your unique credit history. 

However, while estimating your monthly payments is a great starting point, there are a few other factors to consider when evaluating your loan offers. Here are a few tips to help you out:

1. Shop around: A common mistake many borrowers make is going with the first lender they come across. You’ve probably done some research to find a quality lender, but shopping around will help you secure the best rates and terms. Cast a wide net when getting quotes to make sure you have a good understanding of all your options. 
2. Consider overall costs: Monthly payments are an important factor, but don’t focus solely on that. Instead, assess the overall total cost. This includes the principal amount borrowed, any associated fees and the interest you’ll pay over the life of the loan.
3. Read the fine print: Avoid surprises by reading your loan agreement carefully before you sign anything. Look for any sneaky charges or fees that might affect the cost of the loan. Some of those fees include origination fees or early repayment penalties.
4. Look for perks: Some lenders offer additional benefits that can make their loans more attractive. For example, LightStream offers a “Rate Beat Program” that allows you to get 0.10 percentage points lower than you can find with its competitors, and Upgrade offers a rate discount for borrowers who use their loans for debt consolidation. Other lenders offer discounts for things like holding an active checking account with them or for setting up autopay. And credit unions may have even better perks for their members. These discounts can often be found in the FAQ section of lender websites or in the fine print at the bottom of the web page.

Frequently Asked Questions About Personal Loans

How do you calculate monthly payments on a personal loan?

You can use an online calculator like the one above to estimate your monthly payments for a personal loan, or you can plug your information into this formula:

A = P{[r(1+r)n]/[(1+r)n-1]}

A = monthly payment

P = principal

R = monthly interest rate

N = loan term (months)

Does loan term affect monthly payments?

Loan terms can significantly impact monthly payment amounts on your loan. A longer loan term will spread your payments out further, but will often come with a higher interest rate, which will make the loan amount higher.

What credit score is needed for the lowest interest rates?

While lenders go by more than just what’s on your credit report and some loan to people with bad credit, you’ll generally need a score of at least 670 to get the best rates.

Should I accept the first loan offer I receive?

We at the MarketWatch Guides team always suggest shopping around for the best rates and terms for your unique situation. Prequalifying for loans with multiple lenders will help you choose the one that best fits your needs.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.