Personal Loan Calculator

A level-payment loan is priced so that the present value of every payment equals the amount borrowed. Rearranged for the payment that gives M = P · i(1+i)^n / ((1+i)^n − 1), where P is the amount borrowed, i is the annual rate divided by twelve and n is the number of monthly payments. Each month the lender takes that month’s interest on the balance you still owe first, and whatever is left of the payment reduces the balance.

Because interest is billed in whole cents. The payment is rounded to the cent once, and then each month’s interest is rounded to the cent before it is subtracted, so the last payment has to be trimmed or topped up to land the balance on exactly zero. This calculator walks all the months the way a servicer bills them, which is why the total differs from the closed-form figure by cents to a couple of dollars — in either direction.

Yes, and the reason is compounding in reverse. An extra payment reduces the balance in the month you make it, so every remaining month charges interest on a smaller number. The saving compounds, which is why $200 a month on a $25,000 loan at 6.99% saves far more than $200 times the number of months you finish early. Enter an amount above and compare the total interest with and without it.

No. The note rate prices the loan itself and is what drives your monthly payment, which is why this calculator asks for it. The APR folds origination fees and certain other charges into a single comparison figure, so it is normally higher than the note rate on a loan with fees and identical on a loan without them. Use the note rate here and the APR when comparing offers from different lenders.

The payment is simply the amount borrowed divided by the number of months, and the total interest is zero. Promotional 0% financing is real, but read the agreement: deferred-interest offers charge the whole accrued balance retroactively if any part of the debt is outstanding when the promotional period ends. A true 0% loan does not do that.

Usually, but check the agreement first. A prepayment penalty is a fee some lenders charge if you pay off all or part of your mortgage early; not all mortgages have one, and other loan types can carry their own early-payoff charges. Where extra payments are allowed, tell the servicer in writing to apply the extra amount to principal — otherwise some will hold it as a prepayment of the next scheduled instalment, which does not reduce your balance and saves you nothing.