David is a Chartered Financial Analyst and a personal finance expert specializing in consumer credit and debt consolidation strategies.
This 4-in-1 Personal Loan calculator helps you plan your borrowing. Enter any three values—Loan Amount, Annual Rate, Term, or Monthly Payment—and we will solve for the fourth.
Personal Loan Calculator
Personal Loan Amortization Formulas
i = R / 12 / 100 (Monthly Rate)
n = T * 12 (Number of Months)
Solve for Monthly Payment (M):
M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Solve for Loan Amount (P):
P = M * [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]
Solve for Term (n):
n = log( M / (M – P*i) ) / log(1 + i)
Solve for Rate (i):
(No direct formula; solved iteratively)
Formula Variables
- (P) Loan Amount: The total amount of money you are borrowing.
- (R) Annual Rate: The Annual Percentage Rate (APR) for the personal loan.
- (T) Loan Term: The length of the loan in years (e.g., 3, 5, or 7).
- (M) Monthly Payment: The fixed monthly payment to repay the loan in full.
Related Calculators
- Loan Affordability Calculator
- Debt to Income (DTI) Calculator
- Auto Loan Calculator
- Simple Interest Calculator
What is a Personal Loan Calculator?
A personal loan calculator is a tool that helps you estimate the monthly payments on an unsecured personal loan. Unlike a mortgage or auto loan, a personal loan is typically “unsecured,” meaning it is not backed by collateral like a house or car. Because of this, interest rates are often higher and depend heavily on your credit score.
Personal loans are commonly used for a variety of purposes, such as consolidating high-interest credit card debt, financing a home improvement project, or covering a large, unexpected expense. They are installment loans, meaning you borrow a fixed amount of money and pay it back in fixed monthly payments over a set term (e.g., 3 to 7 years).
This 4-in-1 calculator is a powerful planning tool. You can solve for the (M) Monthly Payment to see if a loan fits your budget. Or, you can solve for the (P) Loan Amount to see how much you can borrow based on a payment you can afford. You can also solve for (R) to verify a lender’s offer or (T) to see how quickly you can be debt-free.
How to Calculate a Personal Loan (Example)
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Identify Loan Variables
You want to consolidate credit card debt:
• Loan Amount (P): $20,000
• Annual Rate (R): 9.99%
• Loan Term (T): 5 years -
Convert to Monthly Terms (i, n)
The formula uses monthly values:
• Monthly Rate (i): 9.99% / 12 / 100 = 0.008325
• Number of Months (n): 5 years * 12 = 60 -
Choose the Payment Formula
Use the standard formula to solve for Monthly Payment (M):
M = P * [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] -
Calculate the Monthly Payment
Plug in the monthly values:
• Numerator: 0.008325 * (1 + 0.008325)^60 = 0.01370
• Denominator: (1 + 0.008325)^60 – 1 = 0.6453
M = $20,000 * [ 0.01370 / 0.6453 ]
M = $20,000 * 0.021229 = $424.58
Your monthly payment will be $424.58.
Frequently Asked Questions (FAQ)
What is a good APR (R) for a personal loan?
APRs on personal loans vary widely based on your credit score. An excellent score (760+) might get you a rate under 10%. A good score (700-759) might see rates from 12% to 18%. Fair or poor credit could result in rates of 25% or higher. It’s essential to shop around.
How is this different from a credit card?
A personal loan gives you a fixed amount of money upfront with a fixed interest rate and a fixed repayment term. A credit card is a “revolving” line of credit with a variable interest rate and a low minimum payment, which can keep you in debt for decades if you only pay the minimum.
How can I find what loan I can afford?
First, determine a safe Monthly Payment (M) that fits your budget. Then, get pre-qualified with a lender to find the Annual Rate (R) you’re offered. Enter (M), (R), and your desired Term (T) (e.g., 3 or 5 years) to solve for the Loan Amount (P).
Can I pay off a personal loan early?
In most cases, yes. The vast majority of personal loans do *not* have “prepayment penalties.” You can pay extra each month or make a lump-sum payment to pay it off faster and save on interest. Use this calculator to solve for (T) to see the effect of larger payments.