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Calculate monthly payments and total interest for any personal loan or auto loan.
Personal loans use the same amortization formula as mortgages. Monthly payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (APR ÷ 12), and n is the number of monthly payments.
The critical detail: most of your early payments go to interest, not principal. On a $10,000 loan at 12% APR for 36 months, your first payment of $332.14 splits roughly into $100 interest and $232 principal. By month 36, almost all of it is principal. This is why paying extra in the early months is so valuable.
The interest rate is the annual cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus any fees (origination fees, annual fees). A loan advertised at 9% with a 2% origination fee has an effective APR above 9%. Always compare APRs, not just interest rates, when evaluating loan offers.
A 24-month term on a $10,000 loan at 12% APR: monthly payment = $470.73, total interest = $1,297.52. A 60-month term: monthly payment = $222.44, total interest = $3,346.67. The longer term saves $248/month but costs $2,049 more in total interest. Use this calculator to find the right balance between monthly affordability and total cost. Read the personal loan guide →
Monthly payment = P × [r(1+r)^n] ÷ [(1+r)^n - 1], where P is loan amount, r is monthly rate (APR ÷ 12), and n is number of months. For $10,000 at 10% APR over 36 months: r = 0.00833, monthly payment = $322.67.
Rates vary by credit score. Excellent credit (750+): 6-12% APR. Good credit (700-749): 12-18%. Fair credit (640-699): 18-25%. Poor credit (<640): 25-36% or loan denial. Always shop multiple lenders and compare APRs, not just advertised rates.
Most personal loans allow early payoff with no penalty. Paying extra each month reduces the principal faster, cutting total interest paid significantly. Check for prepayment penalties before your first extra payment — some lenders charge fees for early payoff.
Personal loans have fixed terms, fixed payments, and typically lower APRs than credit cards (especially for good-credit borrowers). Credit cards are revolving credit with variable minimum payments. For a known lump-sum expense, a personal loan is usually cheaper than carrying a credit card balance.