Loan Calculator — Calculate Monthly Payments
Work out your monthly loan payment, total interest and total repayment amount for any personal loan. Free, instant and accurate — with AI-powered advice on your figures.
How to Calculate a Loan Payment
Whether you're borrowing for a car, a home improvement project, debt consolidation or any other personal reason, the maths behind a loan payment is the same everywhere. (Examples below use generic currency units — the calculator works in your own currency.) Three numbers determine your monthly payment: the amount borrowed, the interest rate, and the loan term. If you're specifically financing a vehicle, our Car Loan Calculator includes extra features like deposit and trade-in value.
Example: 10,000 at 8% APR over 3 years → monthly payment = 313.36
This calculator handles the maths instantly — enter your loan amount, interest rate and term above for an immediate breakdown.
Types of Personal Loans
Not all loans work the same way. Understanding which type you're taking out affects how the numbers play out over time.
| Loan Type | Typical APR | Typical Term | Common Use |
|---|---|---|---|
| Secured personal loan | 5–12% | 1–7 years | Larger amounts, backed by an asset |
| Unsecured personal loan | 7–20% | 1–5 years | Debt consolidation, home improvements |
| Credit union loan | 6–15% | 1–5 years | Often better rates for members |
| Payday/short-term loan | 300%+ | Weeks to months | Avoid where possible — extremely high cost |
How Loan Term Affects Total Cost
A longer loan term reduces your monthly payment but increases the total interest you pay over the life of the loan. This is one of the most important trade-offs to understand before signing any loan agreement.
| Loan Term | Monthly Payment | Total Interest |
|---|---|---|
| 2 years | 451.58 | 838.42 |
| 3 years | 313.36 | 1,281.06 |
| 5 years | 202.76 | 2,165.55 |
| 7 years | 155.86 | 3,092.35 |
This example is based on a 10,000 loan at 8% APR. Notice that stretching the loan from 2 to 7 years reduces the monthly payment by roughly 296, but increases the total interest paid by nearly 2,254. Always balance affordability today against total cost over time.
How to Get a Better Loan Rate
- Check your credit score first. Your credit score is the single biggest factor lenders use to set your rate. Checking it before applying — and improving it if needed — can save you significantly over the life of the loan.
- Compare multiple lenders. APRs can vary substantially between banks, credit unions and online lenders for the exact same loan amount and term. Getting quotes from at least 3-4 lenders is worth the time.
- Consider a shorter term if you can afford it. A shorter term means less total interest paid, even though the monthly payment is higher.
- Avoid unnecessary add-ons. Payment protection insurance and other add-ons increase your total cost — only add these if you genuinely need the protection.
- Check for early repayment fees. If you might want to pay off the loan early, check whether the lender charges a penalty for doing so before signing.
Loan Worked Example
Monthly payment: 376.19
Total repaid: 18,057.12
Total interest: 3,057.12
Interest as % of loan: 20.4%
In this example, borrowing 15,000 actually costs 18,057.12 once interest is included — over 3,000 more than the amount borrowed. This is why comparing the total cost of a loan, not just the monthly payment, matters so much when choosing between options.
What This Calculator Shows You
FAQs
How do I calculate my monthly loan payment?
Enter your loan amount, interest rate and term into the calculator above for an instant result. The formula divides the loan into equal monthly payments that cover both principal and interest.
What is a good APR for a personal loan?
For borrowers with good credit, personal loan APRs typically range from 6% to 15%. Rates above 20% are common for those with lower credit scores or unsecured loans with higher risk to the lender.
What's the difference between a secured and unsecured loan?
A secured loan is backed by an asset (like your home), usually offering a lower rate but risking that asset if you default. An unsecured loan has no collateral requirement but typically carries a higher interest rate.
Should I choose a longer or shorter loan term?
A shorter term means higher monthly payments but significantly less total interest paid. A longer term reduces your monthly payment but increases the total cost of borrowing. Choose based on what you can comfortably afford monthly while minimising total interest where possible.
How can I get a lower interest rate on a loan?
Improving your credit score before applying, comparing multiple lenders, and choosing a shorter term are the most effective ways to secure a lower rate.
What happens if I pay off my loan early?
Many loans allow early repayment, which reduces your total interest cost. However, some lenders charge an early repayment fee — always check your loan agreement before making extra payments.
How is loan interest calculated?
Interest is calculated on the outstanding balance each month. As you pay down the loan, the interest portion of each payment decreases while the principal portion increases.
Is this loan calculator free?
Yes — completely free, no sign-up required. Enter your loan details above for instant results.