What is APR vs. interest rate?

APR (Annual Percentage Rate) includes both the interest rate and any lender fees rolled into the cost of borrowing. A loan might have a 9% interest rate but a 10.2% APR once origination fees are included. Always compare loans using APR — it's the true annualized cost.

What's a good personal loan interest rate?

As of 2024, personal loan rates range from about 7–10% for excellent credit (720+) to 20–36% for poor credit. Credit unions typically offer lower rates than banks. A rate under 12% is generally reasonable for unsecured personal loans. Anything above 20% should prompt you to explore alternatives — a balance transfer card, borrowing from a 401(k), or delaying the purchase.

How does paying extra reduce total interest?

Extra principal payments reduce your balance faster, which means future interest is calculated on a smaller amount. Even one extra payment per year on a 5-year loan can cut months off the timeline and save hundreds in interest. This calculator shows the baseline — to model extra payments precisely, use the amortization calculator.

How is the first payment split between interest and principal?

The first month's interest = loan balance × monthly rate. The rest of the payment reduces principal. For a $10,000 loan at 11.5% APR: first month's interest = $10,000 × 0.009583 = $95.83. Of a $329 payment, $233 goes to principal and $96 to interest. Each month, as the balance falls, slightly less goes to interest and slightly more to principal.

Can I pay off a personal loan early?

Most personal loans allow early payoff without penalty, but some charge a prepayment penalty — check your loan agreement. If there's no penalty, paying early saves all remaining interest from the payoff date forward, which can be substantial on longer-term loans.

🏦Borrowing

Loan Payment Calculator

How much will this loan cost you?

What This Does

Every loan has three numbers that matter: the monthly payment, the total interest paid, and the total amount you'll repay. Most lenders show you the first one prominently and bury the other two. This calculator shows all three immediately. Enter a loan amount, annual interest rate, and term in either months or years. You'll see exactly what you owe each month, how much of the total repayment is interest, and the full cost over the life of the loan. This works for any fixed-rate loan — personal loans, auto loans, home improvement loans, medical debt, or anything with a set term and rate. The number most people underestimate is total interest. A $15,000 personal loan at 12% APR over 5 years has a monthly payment of $333 — which sounds manageable. But the total interest paid is $4,996. You're paying a third of the principal back in interest alone. Seeing that number upfront is what motivates people to either shop for a better rate, put more down, or shorten the term. Use this before signing any loan agreement. Run it with the APR on the lender's document, not just the advertised rate.

Assumptions

·Assumes a fixed interest rate for the entire loan term
·Uses simple amortization — each payment covers that month's interest first, remainder reduces principal
·Does not include origination fees or other upfront costs in the monthly payment (factor those into the APR)
·Assumes payments are made on time every month with no extra principal payments

How It's Calculated

Monthly payment uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n – 1] Where: M = monthly payment · P = loan principal · r = monthly interest rate (APR ÷ 12) · n = total payments (term in months). Total interest = (M × n) – P Total repaid = M × n Example: $10,000 loan · 11.5% APR · 36 months → r = 0.009583, n = 36 → M = $329/month · Total interest = $1,844 · Total repaid = $11,844.

When Should You Use This?

→Before taking any fixed-rate loan — personal, auto, home improvement, or debt consolidation
→Comparing loan offers from different lenders — plug in each APR to see the dollar difference
→Deciding between a shorter or longer term — see how much interest you save by paying off faster
→Estimating how a new loan fits into your monthly budget before applying
→Understanding an existing loan — verify your lender's math or see how much interest remains

Worked Examples

Example 1: Personal loan — 36 vs 48 months

Inputs: Loan: $10,000 · APR: 11.5%

Result: 36 months: $329/mo · total interest $1,844 | 48 months: $263/mo · total interest $2,618 · extra cost for lower payment: $774

You pay $66 less per month over 48 months but $774 more in total interest. If the lower payment is necessary for your budget, that's a reasonable trade-off — but if you can manage $329/month, the 36-month loan is the better financial choice.

Example 2: Rate shopping — 9% vs 15% APR

Inputs: Loan: $8,000 · Term: 48 months

Result: 9% APR: $199/mo · total interest $1,570 | 15% APR: $222/mo · total interest $2,683 · cost of higher rate: $1,113

A 6 percentage point difference in APR costs $1,113 more over the same loan. This is why improving your credit score or shopping multiple lenders before borrowing is worth the effort.

💳 Loan Payment Calculator

Monthly Payment · Total Interest · Rate & Term Sensitivity · Extra Payment Impact

Results update in real time. Includes amortization schedule, rate ±2% scenarios, term comparison, and extra payment savings.

💳 Loan Details

Loan Amount

Annual Interest Rate

Loan Term

Monthly Income (optional)

About This Calculator

This loan payment calculator computes monthly payment, total interest, and full amortization in real time from 4 inputs via useEffect. Core formula: M = P × (r(1+r)^n) / ((1+r)^n − 1), where P = principal, r = monthlyRate (annualRate/12/100), n = months. totalInterest = M × n − P. interestRatio = totalInterest / P. Score: rateScore (30pts: ≤4%→30, ≤7%→24, ≤10%→16, ≤15%→9) + termScore (30pts: ≤24mo→30, ≤36→24, ≤48→16, ≤60→10) + ratioScore (25pts: ≤8%→25, ≤18%→20, ≤30%→13, ≤50%→8) + incomeScore (15pts: ≤10%→15, ≤15%→10, ≤20%→6).

Balance Decay tab: AreaChart with two series — remaining balance (indigo, fills to zero) and cumulative interest paid (red), sampled to ≤24 data points, with ReferenceLine at 50% paid. Rate Sensitivity tab: BarChart of monthly payment at 5 rates (±2%), green for cheaper than your rate, red for more expensive, ReferenceLine at your payment, plus rate table and term comparison table. Extra Payments tab: BarChart of interest saved at +$0/+$50/+$100/+$200/month extra, plus full payoff detail table with time saved column. Collapsible amortization schedule with 12-row preview and expand option.

Results are estimates only and do not constitute financial, tax, or legal advice. Always consult a qualified professional before making financial decisions.

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Common Mistakes to Avoid

✕Focusing only on the monthly payment instead of total interest paid — a longer term can look cheaper but cost significantly more
✕Confusing APR with interest rate — APR includes fees; always compare loans using APR
✕Not checking your credit score before applying — even a 30-point improvement can drop your rate by 1–2%
✕Rolling fees into the loan balance without understanding they'll accrue interest over the full term
✕Missing that extra payments save disproportionate interest — even one extra payment per year matters significantly

Frequently Asked Questions