Personal Loan Calculator

How to Use This Calculator

• Figure out how much you actually need. Don't borrow extra just because you qualify.
• Check your credit score first at annualcreditreport.com. Scores above 720 typically qualify for rates under 10%. Below 630? You're looking at 20%+ or even 36%.
• Research rates from banks, credit unions, and online lenders. Rates vary wildly—compare at least 3-5 offers.
• Enter origination fees accurately. Some lenders charge 1-8% of the loan, others charge flat fees ($50-$500), and some charge nothing. This makes a huge difference in total cost.
• Understand fee structure. Some lenders deduct the fee from what you receive (borrow $9,600, get $9,120), while others add it to what you owe (borrow $9,600, owe $10,080 after fee). Ask which method your lender uses.
• Compare total cost of loan, not just monthly payment.
• If consolidating credit card debt, make sure the personal loan APR is meaningfully lower than your card rates (at least 3-5% lower to justify fees).
• Factor in your debt-to-income ratio. Lenders want this below 40%—meaning your total monthly debt payments shouldn't exceed 40% of your gross monthly income.

Understanding Your Personal Loan

Monthly Payment

Your fixed monthly payment stays the same throughout the loan term.

Unlike credit cards with variable minimum payments (typically 1-3% of balance), you'll always know exactly what you owe. This predictability is one of the main advantages of personal loans over revolving credit.

Origination Fees

These upfront fees (typically 1-8% of the loan amount) are how lenders make money beyond interest, especially on shorter-term loans where they'd otherwise earn less.

A $9,600 loan with a 5% fee means you either receive $9,120 or owe $10,080.

Online lenders tend to charge higher origination fees but may offer lower APRs. Credit unions often charge no origination fee but slightly higher APRs. Always factor this into comparison shopping—a loan with 9.5% APR and 5% origination fee may cost more than one with 11.75% APR and 0% origination fee if you pay it off quickly.

Interest Costs vs Credit Cards

Personal loans typically have lower APRs than credit cards (9.5-15% vs 17.99-24.99% for average credit). You'll pay them off faster with fixed payments instead of minimum payments.

Say you have $9,600 in credit card debt at 19.99% APR. Paying minimum payments takes 15+ years and costs $11,500+ in interest. The same amount on a 3-year personal loan at 11.75% APR costs about $1,875 in interest and you're debt-free in 36 months. You save $9,625.

True APR

True APR includes origination fees in the calculation. If you borrow $9,600 at 11.75% but pay a $336 origination fee, your true APR might be 13.25%. This reflects the actual cost of borrowing.

Personal Loan Tips

• Check your credit report before applying at annualcreditreport.com. Errors like incorrect late payments can tank your score and jack up your rate. Dispute errors first.
• Pre-qualify with multiple lenders using soft credit checks—this won't hurt your score. Only do the full application (hard inquiry) with your top choice.
• Credit unions often beat banks on personal loan rates by 2-4%. Membership requirements are usually easy. Some credit unions offer rates as low as 6-8% for excellent credit.
• Never use payday loans, title loans, or cash advances. APRs often exceed 400% (not a typo), trapping you in a debt cycle. A $500 payday loan costs $75 every two weeks just to roll over. After a year, you've paid $1,950 in fees and still owe the $500. Don't do it.
• If consolidating credit card debt, cut up your cards after paying them off or keep one emergency card in a drawer, not in your wallet. 70% of people who consolidate with personal loans run up new balances within two years. They end up with both the loan payment and new card debt. Don't be that person.
• Watch out for prepayment penalties—some lenders charge 2-5% of the remaining balance if you pay off your loan early.
• Consider a 0% balance transfer credit card instead if you have good credit (680+). 0% APR for 12-18 months can beat personal loan rates if you can pay it off during the promotional period. Watch out for 3-5% balance transfer fees and don't miss the end of the promo period when rates jump to 20%+.
• Never take a personal loan for investments, crypto, or gambling. The guaranteed interest cost (10-15%) will likely exceed any potential returns.
• Beware of "no credit check" or "guaranteed approval" personal loans—these are predatory with rates often above 100% APR and fees that add 20-50% to your balance.

When to Use a Personal Loan

Good Reasons

• Consolidating high-interest credit card debt when you'll actually save money. Credit cards at 22% APR? A personal loan at 11.75% cuts your interest nearly in half.
• Emergency expenses when you have no emergency fund. Medical bills, urgent home repairs (roof leak, broken furnace), or essential car repairs. These situations can't wait, and a personal loan beats a credit card's 20%+ APR.
• Home improvements that increase property value—major remodels, additions, critical repairs.
• Consolidating multiple debts to simplify payments. Juggling 8+ payments gets consolidated to one. Just make sure the rate is lower than what you're currently paying.

Bad Reasons

• Vacations you can't afford. Can't save $2,850 for a trip? You definitely can't afford the $3,185 it'll cost after interest.
• Investing borrowed money in stocks, crypto, or business ideas. Investment might tank. Loan payments won't.
• Definitely not for gambling. This enables addiction. Seek professional help instead.
• Another loan to pay off personal loans—this is a debt spiral. Seek credit counseling now.
• Expenses you could save for in 3-6 months. Want a $1,875 laptop? Can save $365/month? Just wait six months. Don't blow $185 on interest just because you're impatient.

Using Personal Loans for Debt Consolidation

Calculate Your Savings

Add up all your credit card balances and average APRs. Average card APR above 15%? Personal loan rate below that? You'll save money.

Don't forget origination fees—a 5% origination fee on a $9,600 loan costs $480 upfront, which negates some savings.

Don't Make the Loan Term Too Long

Consolidating $9,600 of credit card debt into a 6-year personal loan might lower your monthly payment from $285 to $195, but you'll pay more total interest than paying off the cards in 3 years.

Run the numbers both ways—if you can afford the 3-year payment, don't stretch to 6 years just to lower the monthly amount.

Stop Yourself from Running Up New Debt

Biggest mistake: paying off cards, then maxing them out again. Now you've got the loan payment PLUS new card debt. Worse than where you started.

Cut up cards after paying them off. Keep one emergency card in a drawer, not your wallet. Delete saved cards from shopping sites. Fix whatever spending pattern caused this.

Consider the Payoff Timeline

Can you pay off your credit cards in 12 months without a loan (raise, bonus, tax refund)? The hassle and fees might not be worth it. Personal loans work best when they cut years off your payoff timeline.

Factor in Fees When Comparing

A credit card at 17.99% APR with no fees might be better than a personal loan at 11.75% with a 5% origination fee if you can pay it off in under 18 months. Use this calculator to compare.

Real Example

$14,500 in credit card debt at 19.99% average APR, paying $385/month = 54 months to payoff, $6,890 in interest.

Same debt as a personal loan at 11.75% APR with 3% origination fee ($435) on a 48-month term = $385/month payment, $3,345 in interest + $435 fee = $3,780 total cost.

You save $3,110 and are debt-free 6 months sooner.

How Personal Loans Affect Your Credit Score

Short-Term Negative Impacts

Initial hard inquiry temporarily drops your score.

This recovers within a few months. If you apply to multiple lenders, each hard inquiry counts separately (mortgage applications get grouped; personal loans don't), so pre-qualify with soft checks first.

Immediate Positive Impact from Debt Consolidation

If you're consolidating credit cards, your credit utilization drops dramatically. Got $9,600 in balances across cards with $14,400 total limits? That's 67% utilization. Paying them off with a personal loan drops your card utilization to 0%.

Utilization makes up 30% of your credit score. Dropping from 67% to 0% can boost your score significantly in 1-2 months. Personal loans don't count toward utilization—only revolving credit (cards) does.

Long-Term Positive Impact from On-Time Payments

Payment history is 35% of your credit score. On-time loan payments build that history.

Credit Mix Improvement

Credit mix accounts for 10% of your score.

Adding an installment loan when you only have credit cards helps your score over time. Having both revolving credit (cards) and installment loans (personal loans, auto loans, mortgages) shows you can handle different types of credit.

Warning: Don't Close Paid-Off Credit Cards

After consolidating credit card debt with a personal loan, keep your credit cards open with $0 balance. Closing them reduces your available credit, which increases your utilization if you use any cards in the future.

It also reduces your average account age. Keep the cards but don't use them—cut them up if necessary, but keep the accounts open.

The Two-Year Rule

It takes about 24 months of on-time personal loan payments to see maximum positive impact on your credit score.

Planning to apply for a mortgage or auto loan in the next 6-12 months? Be aware that the new personal loan might temporarily hurt your score. Plan major credit applications accordingly.