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This free personal loan calculator helps you estimate the total cost of a personal loan—including your monthly payments and APR—so that you can make smart, informed decisions about your financial activity.
How to Use This Personal Loan Calculator
This free personal loan payment calculator helps you estimate your monthly payment, allowing you to assess your ability to repay and weigh if a personal loan is in your best interest.
To use this calculator, provide some basic information, such as the amount you’re hoping to secure and the length of time you plan on borrowing it.
Once you’ve filled out all fields on the calculator, you’ll see an accurate estimate of your monthly payment and the total cost of your loan.
How to Shop for a Personal Loan
Before applying for a loan, follow these simple steps:
1. Determine your borrowing need and repayment ability
A loan for too little may not cover your financial needs, but a loan for too much will result in you paying interest on the money you didn’t need.
Before you talk to a lender, determine how much of a loan you need and assess how much you can (and are willing) pay for that loan every month.
Rather than jumping first and asking questions later, it’s helpful to know what you need before seeking a loan.
2. Check your credit
Almost every lender will require a credit report before issuing a loan, and this hard inquiry has a negative (but temporary) impact on your credit score.
Other tools like Credit Karma estimate your credit score based on your activity, though their estimates are not always accurate.
Check your credit before applying to assess your financial situation and address any issues proactively.
3. Pre-qualify for a loan
Many financial institutions offer pre-qualifications for personal loans. A pre-qualification is not a legally binding agreement, but an estimate by the financial institution that they will likely approve your loan based on the information you’ve provided.
However, remember that this pre-qualification is usually conditioned on you providing additional information like pay stubs or tax documents.
4. Compare lenders
The Truth In Lending Act (TILA) requires financial institutions to provide a standardized disclosure in most situations that allow you to make apples-to-apples comparisons between financial institutions.
This information should include things like loan terms and the amount, total payments, and origination fees.
Personal Loan Definitions
Loan Amount: The dollar amount you are borrowing is the loan amount. This differs from the total loan cost, the loan amount plus interest, and other loan expenses.
The loan amount is also called “principal.”
Loan term: While “loan terms” is sometimes used to describe many variables in a loan, “loan term” refers to the length of time before the loan matures or becomes due and can be measured in both months and/or years.
For example, a loan term of 120 months means that you must repay the loan within 10 years.
Loan balance: The loan amount you still need to repay is the loan balance. The loan balance doesn’t include the interest you have (or will, in the future) accrued, only the amount of principal that you haven’t yet repaid.
Annual interest rate: Your annual interest rate is the percentage of your remaining principal that you’ll pay as a cost of the loan.
This amount compounds annually but is recalculated on each statement.
Principal: In the simplest terms, the principal amount is simply the amount you borrowed and have not yet repaid. The principal does not include interest or other fees.
Estimated APR: APR, or Annual Interest Rate, includes the compound interest you’ll pay over the course of the loan as well as any other fees or expenses.
The annual Interest Rate is the annual cost of the loan, including fees and expenses, not just the interest you’ll pay.
Origination fee: The origination fee is an expense of the loan you pay directly to the financial institution. Financial institutions charge this fee to cover their expenses in originating the loan.
Secured personal loan: When your loan is backed up by collateral, it’s a secured personal loan. If you fail to repay, the financial institution may have a legal right to the collateral, such as your home or vehicle.
Unsecured personal loan: When your loan is not secured by collateral, it’s an unsecured personal loan. The financial institution issues unsecured personal loans based on your creditworthiness.
However, it doesn’t mean they have no recourse: they may still pursue legal action to secure repayment if you fail to pay your loan.
What can I use a personal loan for?
As the name suggests, a personal loan is for personal expenses, such as debt consolidation or home improvement.
There are only a few things you can not use a personal loan for: college tuition, home purchase, and business purposes.
If you need money for one of those expenses, you would need to turn to student loans, mortgages, or commercial lending.
What is a good interest rate on a personal loan?
Due to inflation and rising federal interest rates, interest rates have been highly volatile in 2022.
Today, interest rates for personal loans range from about 7-36%. This huge range accounts for different factors like loan amount, term, and credit score.
This free personal loan rate calculator can help you know what to expect.
How do I get a personal loan fast?
While brick-and-mortar financial institutions pride themselves on personal service and care, online lenders are typically able to offer faster approval and funding.
Online lenders can sometimes approve and fund a loan within days.
How do I get a personal loan with bad credit?
Aside from improving your credit, you may get a personal loan with bad credit by obtaining a co-signer: another person willing to accept responsibility for the loan if you fail to repay.
Alternatively, you may still be able to get approved for a loan, even with bad credit, but you might get a worse rate.