This calculator will compute a personal loan's monthly payment and total interest charges. We also offer a more feature rich loan calculator that includes a loan amortization schedule.
Personal Loan Payments Made Simple
Loans are issued for consumer purchases ranging in value from insignificant daily items, to high-ticket once-in-a-lifetime buys, like vacation homes. Each loan comes with its own terms, depending on where and when it is issued – and by whom.
Repayment obligations are all over the board when it comes to money borrowed. Interest rates, repayment terms, loan life length, and other factors distinguish one loan from another, and make each type of credit product appropriate for particular uses. One common feature remains, however, present on almost all loans people take-out: Interest.
In addition to the unique interest rates they carry, debts are governed by a host of repayment conditions that cannot be generalized. To understand how loans are paid back, it is first necessary to examine origination terms and other individual loan characteristics.
Types of Loans
Borrowing is undertaken for small routine purchase, like food and clothing, as well as big-ticket buys like cars and real estate. Various available loan products specifically serve particular markets, offering unique terms and conditions based on their intended uses. Interest and other costs of doing business fall across a wide range, so when making calculations about loans, it is important to consider these forms of lending:
Mortgages – Real estate represents some of the most expensive purchases people make, requiring financing beyond cash on hand. Hundreds of thousands of dollars are sought for home purchases, locking buyers in to long-term repayment obligations. The interest rates associated with mortgages are some of the lowest available terms issued by banks, credit unions, and other lenders. To satisfy most mortgages, repayment continues for decades, so lenders make-up the low interest margins by collecting payments over many years.
Car Loans – Another relatively low interest financing option prepares consumers for automobile purchases. During recent economic slowdowns, buyers actually found car loan offers with zero interest-rates. The rates illustrate extreme efforts taken to stimulate car sales, so don't expect interest-free car loans to be available at all times. Still, purchases can be timed to take advantage of special promotions and incentives offering lower rates. Like other installment loans, payments are made in fixed amounts, over the life of each loan. Interest is added to amortized principal amounts, accounting for the total debt obligation each billing period.
Credit Cards – Revolving loans are based on open-ended arrangements commonly associated with credit cards. Purchases are posted as they are made, initiating repayment timelines, which card companies and clients agree-to ahead of time. Under the revolving loan contracts, grace periods extend over purchases, when no payments are required. Beyond that, outstanding balances are rolled-over into subsequent billing periods, subject to compounded interest along the way. Unlike installment loans issued for homes and cards, payment amounts and monthly interest obligations on revolving accounts are inconsistent, depending on card use.
Personal Loan – Personal loans cover a variety of expenses, rather than being issued only for specific purchases. Bill consolidation, home improvement expenses, emergency costs, college tuition, and even vacations are funded using personal loans. Like other loans, payback includes interest and principal responsibilities. Personal loan calculator puts payments under the microscope, isolating what is owed where, and how it is applied.