Personal Loan Calculator

How the payment is calculated

The payment comes from the standard amortization formula: M = P × i ÷ (1 − (1 + i)^−n), where P is the amount financed, i is the monthly rate (annual rate ÷ 12) and n is the number of payments. Interest is charged on the remaining balance each month, so early payments are mostly interest and late payments are mostly principal.

A five-year $15,000 loan at 11.5% works out at roughly $330 a month. Stretching the same loan to seven years lowers the payment but raises the total interest, which is the trade this page is designed to show.

Why the APR matters more than the rate

APR includes the fees you pay to get the loan. On a $15,000 loan with a 2% origination fee, $300 never reaches your account but all of it is repaid. Spreading that fee across the payments raises the effective cost above the quoted rate — sometimes by a full percentage point or more.

Two offers with the same rate are not the same loan if one charges 1% and the other 6%. The offer summary shows cash received alongside the APR, so the comparison is like for like.

What is not included

Late fees, returned-payment fees, prepayment penalties, optional credit insurance and any variable-rate reset are excluded, because they depend on the contract and your behavior. The model assumes a fixed rate and payments made on time until the balance reaches zero. Because those costs appear only under specific circumstances, folding them in would turn the estimate into a guess about your conduct rather than a clean arithmetic result.

Most personal loans in the US are simple-interest installment loans with no prepayment penalty, but "precomputed" interest and prepayment penalties still exist in some contracts. Read the fee schedule before signing anything.

What the origination fee and early payoff each cost

Two costs decide most of the total: the fee you pay to get the loan and the interest you pay while holding it. The origination fee is charged up front and never refunded, so it is the same whether the loan runs the full term or is cleared early; the interest is the only part that shortens when you pay extra. On a simple-interest installment loan, extra principal goes straight to the balance, so the saving is the interest those extra dollars would otherwise have accrued — and it disappears entirely if the contract adds a prepayment penalty or uses precomputed interest.

That is why the page prints the APR next to the payment and the true cost next to the fee. The APR already spreads the origination fee across the payments for the full term, which is why a large fee can lift the effective cost by a full percentage point or more; the contract then decides whether paying early is free, penalized, or meaningless under precomputed interest. Two loans at the same quoted rate are not the same cost if one carries a small fee and the other a large one, and the APR is how that difference shows up before you sign.

From the quoted rate to the number you compare

A personal loan is priced twice: once at the rate on the offer, once at the APR that includes the origination fee. The second number is the one to compare, because two lenders quoting the same rate with different fees are not selling the same loan - and the fee is charged whether the loan runs to term or is cleared early.

Cash in hand matters as much as the rate. When the fee is deducted from the proceeds, the amount that lands in your account is smaller than the balance you repay, which is why the offer summary prints both lines next to each other instead of a single headline figure.

Term length then decides how that cost is spread. A five-year loan at the same APR costs more per month and less in total than a seven-year one; if the shorter payment fits, the shorter term is almost always the cheaper contract.