Use this calculator to estimate the interest you might pay on a personal loan based on the loan amount, interest rate, and loan term.
10%
36 months
Estimated Total Interest Paid
$0.00
Understanding Personal Loan Interest
A personal loan is a type of unsecured loan that can be used for various purposes, such as debt consolidation, home improvements, unexpected medical expenses, or major purchases. The cost of borrowing this money is primarily determined by the interest rate charged by the lender.
The interest rate on a personal loan can significantly impact the total amount you repay over the life of the loan. Factors influencing your interest rate typically include your credit score, income, existing debt, the loan amount, and the loan term.
How the Calculator Works
This calculator estimates the total interest you would pay over the life of your loan. It uses a standard loan amortization formula to calculate the monthly payment, and then determines the total interest paid by subtracting the principal loan amount from the total amount repaid.
Monthly Payment Calculation (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount
i = Monthly interest rate (Annual rate / 12)
n = Total number of payments (Loan term in months)
Total Interest Calculation:
Total Interest = (M * n) - P
Key Factors Affecting Your Interest Rate:
Credit Score: A higher credit score generally leads to lower interest rates, as it indicates lower risk to the lender.
Income and Employment Stability: Lenders assess your ability to repay the loan. Stable income and employment can help secure better rates.
Debt-to-Income Ratio (DTI): A lower DTI suggests you have more disposable income to handle new loan payments.
Loan Amount and Term: While not always direct factors for the rate itself, they influence affordability and overall cost. Shorter terms often mean higher monthly payments but less total interest.
When to Use This Calculator:
This calculator is useful for:
Comparing offers from different lenders.
Understanding the potential cost of borrowing before applying for a loan.
Budgeting for loan repayments.
Assessing how changes in interest rate or loan term affect the total interest paid.
Disclaimer: This calculator provides an estimate for informational purposes only. Actual loan terms and interest rates may vary. It is essential to consult with lenders for precise offers.
function updateRateSlider(value) {
var rateSlider = document.getElementById('annualInterestRate');
rateSlider.value = value;
}
function updateTermSlider(value) {
var termSlider = document.getElementById('loanTermMonths');
termSlider.value = value;
}
function calculateInterest() {
var loanAmountInput = document.getElementById('loanAmount');
var annualInterestRateInput = document.getElementById('annualInterestRate');
var loanTermMonthsInput = document.getElementById('loanTermMonths');
var resultDisplay = document.getElementById('result-value');
var P = parseFloat(loanAmountInput.value);
var annualRate = parseFloat(annualInterestRateInput.value);
var n = parseFloat(loanTermMonthsInput.value);
if (isNaN(P) || isNaN(annualRate) || isNaN(n) || P <= 0 || annualRate <= 0 || n <= 0) {
resultDisplay.innerText = "Invalid Input";
return;
}
var i = (annualRate / 100) / 12; // Monthly interest rate
// Calculate monthly payment (M)
var M = P * (i * Math.pow(1 + i, n)) / (Math.pow(1 + i, n) – 1);
// Calculate total interest
var totalInterest = (M * n) – P;
if (isNaN(M) || isNaN(totalInterest)) {
resultDisplay.innerText = "Calculation Error";
return;
}
resultDisplay.innerText = "$" + totalInterest.toFixed(2);
}