calculate-loan

01 Loan payments

Personal Loan Estimated Payment Calculator

Calculator No. 01-6936 · Updated · Formula and assumptions shown below

Monthly payment $405.53
Total interest
$4,331.67
= Monthly payment × loan term × 12 − loan amount
Loan amount
$20,000
Input
Interest rate (APR)
8 %
Input
You enter
Loan amount ($), Interest rate (APR) (%), Loan term (years)
You get
Monthly payment ($), Total interest ($)
Rounding
2 dp

Estimate for education, not financial advice. The result follows from the numbers you enter and the formula shown. It is not a quote or an offer, and it does not include fees, taxes or insurance unless the calculator asks for them. Ask your lender for the exact figures.

This personal loan calculator estimates your monthly payment and total interest from the amount borrowed, annual percentage rate (APR), and repayment term. Enter the figures from a lender’s loan disclosure to see the payment implied by a fixed-rate, monthly-payment calculation.

Formula

The calculator uses the standard fixed-payment loan formula. It converts the annual APR to a monthly rate, then calculates the payment that pays down the principal and interest over the selected number of months:

Monthly payment = P × r ÷ [1 − (1 + r)−n]

  • P is the loan principal, or amount borrowed, in dollars.
  • r is the monthly interest rate, calculated as APR ÷ 1,200. For an APR entered as a percentage, an 8% APR becomes 8 ÷ 1,200 per month.
  • n is the number of monthly payments, calculated as the term in years × 12.

Total interest is calculated as monthly payment × n − P. Because the payment is rounded to cents, the interest estimate uses that displayed, rounded payment. A lender’s final scheduled payment can differ slightly to account for rounding.

Worked Example

Using the calculator’s default inputs—$20,000 principal, 8% APR, and a 5-year term:

  1. Convert the APR to a monthly rate: 8 ÷ 1,200 = 0.0066667.
  2. Convert the term to payments: 5 × 12 = 60 months.
  3. Apply the formula: $20,000 × 0.0066667 ÷ [1 − (1 + 0.0066667)−60] = $405.53 per month, rounded to cents.
  4. Calculate total interest using the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

The estimate is therefore a monthly payment of $405.53 and total interest of $4,331.80 across 60 payments under the stated assumptions.

Assumptions

  • The interest rate is fixed for the entire term.
  • Payments are equal, made monthly, and assumed to occur at the end of each monthly period.
  • Interest accrues monthly using APR divided by 12.
  • The calculation excludes origination or other fees, taxes, insurance, and optional products unless they are reflected in the amount borrowed or rate you enter.

How to Read the Estimate

The monthly payment is the scheduled amount implied by the principal, APR, and term—not a quote or approval decision. The total-interest figure is the estimated interest over all scheduled payments, not the total amount repaid. Add the principal to the interest to estimate total scheduled payments; in the example, that is $24,331.80.

A longer term generally spreads repayment across more monthly payments, which can lower the calculated payment while increasing the time interest accrues. A shorter term has fewer payments and may produce a higher monthly payment. The exact effect depends on the inputs; compare scenarios by changing one input at a time.

What Changes a Personal Loan Payment?

  • Amount financed: A larger principal increases the payment when the rate and term stay the same. If fees are financed, use the financed amount rather than assuming the cash received is the principal.
  • APR: A higher entered APR increases the payment and estimated interest. APR may reflect certain borrowing costs, but this calculator does not separately identify or add fees. Use the lender’s disclosed APR and check how the lender defines the amount financed.
  • Term: The number of monthly payments affects both the payment size and the time over which interest is charged.
  • Payment schedule and charges: A lender’s actual schedule, payment dates, fees, or other contract terms may not match this simplified monthly model.

Enter the amount and APR in the units shown: the loan amount is dollars, APR is an annual percentage, and term is years. Do not enter 0.08 for an 8% APR; enter 8. Also, do not mistake a monthly interest rate for an APR. The calculator performs the APR-to-monthly conversion itself.

Common Limits and Mistakes

This is an estimate for a fixed-rate loan with level monthly payments. It does not model variable rates, irregular payment dates, deferred payments, skipped-payment arrangements, extra payments, or a final adjusted installment. If a lender’s quote includes fees in the amount financed, or uses a different payment schedule, the quoted payment can differ.

Rounding is another source of small differences. This calculator displays the monthly payment to the nearest cent and uses that rounded payment to estimate total interest. A lender may calculate interest daily, round at different stages, or adjust the final payment. For a close comparison, use the lender’s written payment schedule and determine whether any charges are included in the loan balance or paid separately.

Frequently Asked Questions

How much is the monthly payment on a $20,000 personal loan?
It depends on the APR and term. With this calculator’s example inputs of 8% APR and five years, the estimated payment is $405.53 a month.

Does a personal loan payment include interest?
Yes. In a standard fixed-payment loan, each scheduled payment includes interest and repayment of principal. The share going to each changes over time as the outstanding balance falls.

Is APR the same as the monthly interest rate?
No. APR is stated annually. This calculator converts the entered APR percentage to a monthly rate by dividing by 1,200; for example, 8% becomes approximately 0.0066667 per month.

Why is my lender’s payment different from the estimate?
The lender may use a different APR, financed amount, payment timing, fee treatment, interest-accrual method, or rounding schedule. Compare the calculator inputs with the lender’s disclosure and payment schedule.

Does this estimate include loan fees?
No separate fee input is included. If a fee is financed, it may increase the principal used in the lender’s payment calculation; otherwise, a fee paid separately is not represented in the monthly payment shown here.

This result is an estimate, and the lender’s disclosure gives the exact figures.

Related

Formula used
in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2

Each line is one input (in, sel, list) or one result (out: label, unit, formula, decimals). How the calculators work

Method: the standard loan formula for this calculation, fixed rate and monthly compounding unless stated, rounded as each result states. Not financial advice; no lender, rate or product is recommended. See formulas and assumptions, the disclaimer or report an error.

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