Discover offers personal loans to help you consolidate debt, finance a major purchase, cover unexpected expenses, or achieve other financial goals. These loans are typically unsecured, meaning they don't require collateral, and come with fixed interest rates and repayment terms. Understanding how your monthly payment is calculated is crucial for budgeting and making informed financial decisions.
This calculator helps you estimate your potential monthly payment based on the loan amount, annual interest rate, and the loan term (the duration over which you'll repay the loan).
How the Calculation Works (The Math Behind It)
The monthly payment for a personal loan is calculated using the standard annuity formula, which takes into account the principal loan amount, the interest rate, and the loan term. The formula is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly payment
P = The principal loan amount (the amount you borrow)
i = Your monthly interest rate (annual rate divided by 12)
n = The total number of payments (loan term in months)
For example, if you borrow $10,000 at an annual interest rate of 15% for 36 months:
So, your estimated monthly payment would be approximately $347.08.
Using the Calculator Effectively
This calculator is a helpful tool for:
Budgeting: Estimate how much a personal loan will cost you each month.
Comparison Shopping: See how different interest rates and terms affect your payments.
Financial Planning: Determine if a personal loan fits within your budget for debt consolidation, home improvement, or other significant expenses.
Keep in mind that the actual interest rate you qualify for depends on your creditworthiness, income, and Discover's lending policies. This calculator provides an estimate, and actual loan offers may vary.
function updateSliderValue(inputId, sliderId) {
var inputElement = document.getElementById(inputId);
var sliderElement = document.getElementById(sliderId);
var sliderValueElement = document.getElementById(sliderId + 'Value');
if (inputElement && sliderElement && sliderValueElement) {
var value = parseFloat(inputElement.value);
if (isNaN(value)) value = 0;
sliderElement.value = value;
sliderValueElement.textContent = value.toFixed(value < 100 ? 1 : 0) + (inputId === 'annualInterestRate' ? '%' : (inputId === 'loanTermMonths' ? '' : ''));
}
}
function calculateLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermMonths = parseFloat(document.getElementById("loanTermMonths").value);
var monthlyPaymentDisplay = document.getElementById("monthlyPayment");
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermMonths) ||
loanAmount <= 0 || annualInterestRate < 0 || loanTermMonths <= 0) {
monthlyPaymentDisplay.textContent = "Invalid Input";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numerator = loanAmount * monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths);
var denominator = Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1;
if (denominator === 0) {
monthlyPaymentDisplay.textContent = "Error: Division by zero";
return;
}
var monthlyPayment = numerator / denominator;
monthlyPaymentDisplay.textContent = "$" + monthlyPayment.toFixed(2);
}
// Initialize slider values on page load
document.addEventListener('DOMContentLoaded', function() {
updateSliderValue('loanAmount', 'loanAmountSlider');
updateSliderValue('annualInterestRate', 'annualInterestRateSlider');
updateSliderValue('loanTermMonths', 'loanTermMonthsSlider');
});