Loan Parameters
- 1Enter the total Loan Amount (principal balance to borrow).
- 2Set the Annual Interest Rate (%) and select your repayment term in years (e.g. 3, 5, or 10 years).
- 3Review the estimated fixed monthly payment, total interest paid, and total loan cost.
A personal loan is an amortized fixed-rate installment loan repaid in equal monthly payments over a set duration. Each payment covers both interest charges and principal balance reduction.
Fixed monthly installment where P is principal, r is monthly rate (annual / 12), and n is total months.
Monthly Payment = P · [ r(1 + r)ⁿ ] / [ (1 + r)ⁿ - 1 ]Total amount paid back to the lender over the full loan term.
Total Cost = Monthly Payment × Total MonthsTotal finance charge paid above the initial borrowed principal.
Total Interest = Total Cost - Principal Loan AmountPrincipal = $25,000 | 60 Monthly Payments @ 6.5%Total Cost = $489.15 × 60 = $29,349.00With r = 0, Payment = P / n = 25000 / 60- Fixed Rate Assumption: This calculator assumes a fixed interest rate with equal monthly installments over the entire term.
- Shorter Terms Save Interest: Choosing a shorter loan term increases monthly payments but significantly reduces total interest paid.
- Fees & Prepayment: Origination fees, processing charges, or early payoff savings are not factored into this calculation.
How is the monthly personal loan payment calculated?
Monthly payment is calculated using standard amortization formulas based on principal balance, monthly interest rate, and total repayment months.
How does loan term affect total interest?
A longer loan term lowers your monthly payment but increases the total interest paid because interest accrues over more months.
Will paying off a loan early save money on interest?
Yes. Paying off principal faster reduces the remaining balance that generates interest charges in future months.
How is the payment calculated when the interest rate is 0%?
The amortization formula divides by zero at 0%, so the calculator switches to a simple split: loan amount ÷ number of months, with zero total interest.
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