Unsecured Loan Calculator

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Reviewed by: David Chen, CFA
David is a Chartered Financial Analyst with 15 years of experience in consumer lending and unsecured credit markets.

This 4-in-1 Unsecured Loan calculator helps you estimate payments for loans that don’t require collateral. Enter any three variables—Loan Amount, Annual Rate, Loan Term, or Monthly Payment—to solve for the fourth.

Loan Amount ($) (P)

Annual Rate (%) (R)

Loan Term (Years) (T)

Monthly Payment ($) (M)

Unsecured Loan Formulas (Amortization)

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 Loan Term (n, in months):
n = -ln(1 – (P*i / M)) / ln(1 + i)

Solve for Rate (i):
*Solved iteratively (no direct formula)

Formula Source: Investopedia

Formula Variables

(P) Loan Amount (Principal): The total amount of money you are borrowing.
(R) Annual Rate: The annual interest rate (APR) for the loan.
(T) Loan Term (Years): The total length of time you have to repay the loan.
(M) Monthly Payment: The fixed payment amount due each month.
(i): Monthly Interest Rate (R / 12 / 100)
(n): Total Number of Payments (T * 12)

Related Calculators

What is an Unsecured Loan?

An unsecured loan is a loan that is not protected or “secured” by any collateral. Collateral is an asset, like a house (for a mortgage) or a car (for an auto loan), that a lender can seize if you fail to repay the loan.

Because an unsecured loan has no collateral, the lender is taking on more risk. To qualify, you must prove your creditworthiness through your credit score, income, and debt-to-income ratio. This higher risk for the lender also means these loans typically have higher interest rates than secured loans. Personal loans and signature loans are the most common types of unsecured loans.

How to Calculate an Unsecured Loan Payment (Example)

Identify Your Loan Details
You need to borrow $15,000 (P) for debt consolidation. The lender offers you a 5-year (T) unsecured loan at an 11% (R) annual rate. You want to find the monthly payment (M).
Find Monthly Rate (i) and Total Payments (n)
Monthly Rate (i) = 11.0% / 12 / 100 = 0.0091667
Total Payments (n) = 5 Years * 12 Months = 60
Apply the Amortization Formula
The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Calculate the Payment
M = $15,000 [ 0.0091667 * (1.0091667)^60 ] / [ (1.0091667)^60 – 1 ]
M = $15,000 [ 0.0091667 * 1.7293 ] / [ 1.7293 – 1 ]
M = $15,000 [ 0.015852 ] / [ 0.7293 ]
M = $15,000 * 0.021735
Final Result
Your fixed monthly payment (M) will be $326.03 for the next 5 years.

Frequently Asked Questions (FAQ)

Unsecured vs. Secured Loan: What’s the difference?

An unsecured loan is backed only by your credit and promise to pay (e.g., a personal loan). A secured loan is backed by a physical asset (collateral), like a car or house, which the lender can take if you default. Secured loans usually have lower interest rates.

How much can I borrow with an unsecured loan?

This depends entirely on your credit score, income, and debt-to-income ratio. Lenders typically offer unsecured personal loans from as little as $1,000 up to $50,000 or even $100,000 for highly qualified borrowers.

What is the typical interest rate for an unsecured loan?

Rates vary widely based on your credit. Borrowers with excellent credit (720+ FICO) might find rates from 8-15%. Borrowers with fair credit (600s) might see rates from 18-30%. Borrowers with poor credit may face rates of 36% or even higher from specialized lenders.

How do I find the Annual Rate (R) on a loan offer?

You can use this calculator. Enter the Loan Amount (P), the Loan Term (T), and the offered Monthly Payment (M). Leave the “Annual Rate (R)” field blank and click “Calculate.” The result will show you the exact APR of the loan offer, allowing you to compare it with others.

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