How the loan calculator works
Most consumer loans are fully amortizing: you make the same payment every month, and by the last payment the balance is exactly zero. Each payment first covers the interest that built up on the balance that month, and the rest reduces the principal. The calculator finds the payment, totals the interest and shows how the balance falls year by year.
The formula
M = P × r / (1 − (1 + r)−n), where P is the amount borrowed, r is the APR divided by 12 and n is the number of months. If the rate is 0%, the payment is simply P ÷ n.
Example
A $10,000 loan at 7% APR for 36 months has a payment of about $308.77 and costs about $1,116 in interest. Borrowing $20,000 at 10% for 60 months costs about $425 a month and roughly $5,500 in interest, which shows how a larger balance, a longer term and a higher rate multiply the interest you pay.
APR vs. interest rate
Lenders must show an APR, which includes certain fees such as origination charges spread over the loan's life. If your lender deducts an origination fee from the money you receive, the APR will be higher than the note rate. Enter the APR here for the most honest comparison between offers.
Frequently asked questions
What is a good personal loan rate?
It depends mostly on your credit score and income. Borrowers with excellent credit get the lowest rates; compare several pre-qualification offers, which usually use a soft credit check.
Can I pay off a loan early?
Most personal loans have no prepayment penalty, so paying extra reduces interest. Check your loan agreement to be sure.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, which is largest at the start. As the balance shrinks, more of each payment goes to principal.
Does this work for student loans?
Yes, for standard repayment with a fixed rate. Income-driven plans use different rules.
Results are estimates for educational purposes only and are not financial, tax, legal or medical advice. See our disclaimer. Last reviewed 2026-10-22.