How this calculator works
The payment is based on the full loan amount. Because the origination fee usually comes out of the funds you receive, the calculator finds the rate at which your payment would repay only the cash you actually got. That's the effective APR.
Worked example
With the example values below: Monthly payment, $501.80 (36 months). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Loan amount | $15,000 |
| Interest rate | 12.5% |
| Term | 36 months |
| Origination feeUsually deducted from the funds you receive | 4% |
How personal loans work
A personal loan is an installment loan, usually unsecured, that pays you a lump sum and is repaid with fixed monthly payments over a set term, commonly two to seven years. Banks, credit unions and online lenders offer them for debt consolidation, home projects, medical bills and other large expenses.
Rates depend mostly on your credit score and income, and range widely, from single digits for excellent credit to 30% or more for fair or poor credit.
Origination fees and the real APR
Many personal loans charge an origination fee of about 1% to 10% of the loan, and it's usually deducted from the money you receive. Borrow $10,000 with a 5% fee and you get $9,500 but repay the full $10,000 plus interest.
That's why the calculator shows an effective APR: the rate at which your payments would repay only the cash you actually received. Compare effective APRs, not stated rates, when one lender charges a fee and another doesn't. If you need a specific amount in hand, borrow enough to cover the fee.
Choosing the term
A shorter term means a higher payment but less interest; a longer term lowers the payment but costs more overall. On $15,000 at 12%, a three-year loan costs about $498 a month and $2,940 in interest, while a five-year loan costs about $334 a month and $5,020 in interest.
Pick the shortest term whose payment fits comfortably. Most personal loans have no prepayment penalty, so you can pay extra when you're able.
Getting approved at a good rate
If you're consolidating card debt, the debt consolidation calculator compares your current payoff path with a single loan.
- Check your rate with several lenders using prequalification, which uses a soft credit pull.
- Credit unions often have lower rates and fees for members.
- Lower your debt-to-income ratio and card balances before applying.
- Consider a co-signer if your credit is thin, understanding they're fully responsible if you don't pay.
- Avoid add-ons such as credit insurance that raise the cost.
Frequently asked questions
How is a personal loan payment calculated?
With the standard installment formula using the loan amount, monthly rate (APR ÷ 12) and number of months. $10,000 at 12% for 36 months is about $332 a month, with about $1,960 in total interest.
What is a good interest rate on a personal loan?
It depends on your credit. Borrowers with excellent credit can get rates in the single digits or low teens; fair credit often sees 18% to 30% or more. Compare offers through prequalification before applying.
What is an origination fee?
A one-time fee of about 1% to 10% of the loan, usually subtracted from the amount you receive. It raises the true cost, so compare loans by APR rather than interest rate.
Does a personal loan hurt your credit?
The application causes a hard inquiry and a new account, which can lower your score slightly at first. On-time payments build credit, and using the loan to pay off cards can lower utilization and raise your score.
Can I pay off a personal loan early?
Usually yes, and most lenders don't charge prepayment penalties. Check your loan agreement, since a few do.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.