Personal loans are fixed-rate installment loans, usually unsecured, with terms from one to seven years. Your monthly payment depends on three things: how much you borrow, the interest rate and the term. Many lenders also charge an origination fee that comes out of the loan before you receive it. This calculator shows the payment and the full cost so you can compare offers fairly.
How this calculator works
The monthly payment uses the standard amortization formula: the loan is repaid in equal monthly installments, each covering that month's interest plus some principal.
Total interest is all payments minus the amount borrowed. The origination fee is calculated as a percentage of the loan amount; most lenders deduct it up front, so you receive less cash but repay the full amount.
Adding interest and fees gives the true cost of borrowing — the number to compare between lenders, alongside the APR they disclose.
The formula
M = P × r / (1 − (1 + r)^−n)- M
- monthly payment
- P
- loan amount
- r
- monthly rate = APR ÷ 12
- n
- number of months
Worked example
You borrow $15,000 at 12% for 4 years with a 3% origination fee. The monthly rate is 1% and there are 48 payments, so M = 15,000 × 0.01 / (1 − 1.01^−48) ≈ $395.
Over 48 months you repay about $18,960, which means roughly $3,960 in interest. The 3% fee is $450, so you receive $14,550 in your bank account.
Total cost of borrowing is about $4,410. If you need the full $15,000 in hand, you would have to borrow about $15,465 to cover the fee.
Tips
- Prequalify with several lenders — most use a soft credit pull that does not affect your score.
- A shorter term means a higher payment but much less interest.
- Compare APRs, not just interest rates; APR includes the origination fee.
Frequently asked questions
What is a good interest rate on a personal loan?
Rates depend heavily on credit score and income. Borrowers with excellent credit may see single-digit APRs, while fair credit can mean 20% or more. Compare several prequalified offers to see your real range.
Is the origination fee included in the APR?
Yes. Lenders must disclose APR under the Truth in Lending Act, and it includes the origination fee, so APR is higher than the nominal interest rate when a fee applies.
Can I pay off a personal loan early?
Most personal loans have no prepayment penalty, so paying early saves interest. Confirm in your loan agreement before signing.
Is a personal loan better than a credit card?
For a large planned expense or debt consolidation, a personal loan often has a lower fixed rate and a set payoff date. Credit cards are more flexible but usually cost more if you carry a balance.