Loan Calculator

How the Loan Calculator Works

The loan calculator uses the standard amortization formula to compute your fixed monthly payment: M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P = loan principal, r = monthly interest rate (annual rate ÷ 12), and n = total number of monthly payments.

Example: $20,000 loan at 7.5% over 60 months. Monthly rate = 7.5% ÷ 12 = 0.625%. Payment = $20,000 × [0.00625 × (1.00625)^60] ÷ [(1.00625)^60 − 1] = $400.76/month. Total paid: $24,045. Total interest: $4,045. The origination fee comes out of your loan proceeds and is factored into your true APR.

Current Personal Loan Interest Rates (2025)

• Excellent credit (760+): 7–11% APR
• Good credit (700–759): 12–17% APR
• Fair credit (640–699): 18–25% APR
• Poor credit (below 640): 26–36% APR (or declined)
• Credit cards (comparison): 20–29% APR — nearly always worse than a personal loan
• SBA business loans: 11–16% APR depending on program

Personal loan rates dropped from their 2024 highs as the Fed cut rates. If you're consolidating credit card debt, even a 20% personal loan beats 27% credit card APR substantially.

Loan Term vs. Monthly Payment: The Trade-off

On a $20,000 loan at 10% interest, here's how term affects payments:

• 24 months: $922/month | Total interest: $2,128
• 36 months: $645/month | Total interest: $3,220
• 48 months: $507/month | Total interest: $4,322
• 60 months: $425/month | Total interest: $5,496
• 72 months: $371/month | Total interest: $6,682

Cutting from 60 to 36 months saves $2,276 in interest but costs $220/month more. The break-even question: is an extra $220/month worth $2,276 in savings? If you can afford it, shorter terms almost always win.

APR vs. Interest Rate: What's the Real Cost?

Interest rate is the annual cost of borrowing. APR (Annual Percentage Rate) includes origination fees, closing costs, and other charges — it's the true cost of the loan and the only fair comparison metric between lenders.

Example: Lender A offers 8% rate with 2% origination fee on $20,000 = $400 fee. Lender B offers 9% rate with no fees. Over 60 months, Lender A's true APR is ~9.2% when the fee is factored in — making Lender B actually cheaper despite the higher stated rate. Always compare APR.

When a Personal Loan Makes Sense

• Debt consolidation: Replace multiple high-rate cards with one lower fixed payment
• Home improvement: Funded at lower rate than HELOC if equity is limited
• Medical expenses: Convert unexpected bills to predictable monthly payments
• Major purchases: Better than 0% promotional offers that spike to 25%+ if not paid in full

Personal loans are almost never the right choice for ongoing expenses, down payments on assets that will depreciate, or anything you can save for in under 6 months.