Personal Loan Calculator

How the payment is calculated

Personal loans are almost always fixed-rate installment loans: you borrow a lump sum, the lender sets a payment that pays it off in equal monthly installments, and every payment is the same size for the life of the loan. That's a different animal from a credit card, where the balance and minimum payment move every month.

Watch the origination fee

Personal loans often charge 1–8% as an origination fee. A 7% fee on a $15,000 loan means you receive $13,950 but owe interest on the full $15,000. That can push the true APR meaningfully above the stated rate.

The formula

M = P · r(1 + r)ⁿ / ((1 + r)ⁿ − 1)

M = monthly payment
P = loan amount (the fee doesn't change this — see below)
r = monthly rate (APR ÷ 12)
n = number of payments (years × 12)

The origination fee doesn't enter the payment formula at all — it's deducted from the amount disbursed to you, not from the balance you owe. You keep paying M on the full loan amount P regardless of the fee.

Worked example

$15,000 at 11% APR over 3 years, no fee: monthly payment $491.08, total interest $2,678.91, total paid $17,678.91.

Now add a 5% origination fee. You receive $14,250 in cash (5% of $15,000 withheld), but you still repay the full $17,678.91 — same monthly payment, same schedule. Solving for the rate that equates $14,250 today with those 36 payments gives an effective APR of about 14.6%, not the 11% on the paperwork. The fee is invisible in the monthly payment; it only shows up when you compare what you received to what you're paying back.

Frequently asked questions

What's a typical APR for a personal loan?

Roughly 7–25%, depending mostly on credit score, income, and the lender. Borrowers with excellent credit see rates near the low end; subprime borrowers can see rates well above 25% from some online lenders.

Fixed rate or variable?

The large majority of personal loans are fixed-rate for the life of the loan — the payment you start with is the payment you finish with. Variable-rate personal loans exist but are uncommon; read the terms carefully if a lender offers one, since your payment could rise with market rates.

Should I compare loans by rate or by APR?

APR, always, when fees are involved. The stated interest rate ignores origination fees; APR folds them in and gives you an apples-to-apples number across lenders. Two loans with the same rate but different fees are not the same loan.

Is a personal loan cheaper than a credit card?

Usually, if you'd otherwise carry a credit card balance. Personal loan APRs commonly land well below typical credit card APRs, and the fixed term forces payoff instead of letting a balance linger indefinitely. It's worse than a card you pay off in full every month, since that costs 0% interest.