1. What is This Calculator?

This calculator determines the monthly payment for a $25,000 personal loan with an 84-month (7-year) repayment term. It helps borrowers understand their payment obligations based on different interest rates.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment (USD)
• \( P \) — Principal amount ($25,000)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of payments (84 months)

Explanation: The formula accounts for the time value of money, calculating equal payments that pay off the loan with interest over the term.

3. Understanding the Results

Details: The results show your monthly payment, total repayment amount, and total interest paid over the 84-month term. A higher interest rate significantly increases total repayment costs.

4. Using the Calculator

Tips: Enter the annual interest rate (APR) you've been offered. The calculator will show your estimated monthly payment and total loan cost.

5. Frequently Asked Questions (FAQ)

Q1: Why 84 months for a personal loan?
A: 84-month terms are common for larger personal loans as they offer lower monthly payments, though with higher total interest costs.

Q2: Does this include fees?
A: No, this calculates principal and interest only. Origination fees or other charges would increase your costs.

Q3: How does interest rate affect payments?
A: At 5% APR, monthly payment is ~$353. At 10% APR, it's ~$415 - a $62/month difference adding $5,208 in total interest.

Q4: Are there prepayment penalties?
A: This calculator doesn't account for prepayment. Check your loan terms - paying early can save interest but may have fees.

Q5: Is $25,000 for 84 months a good idea?
A: Depends on your situation. Longer terms mean lower payments but higher total cost. Consider shorter terms if affordable.