Personal Loan Calculator
This personal loan calculator figures your monthly payment and total interest cost based on the purchase price, down payment (if any), interest rate and term.
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How Much Will Your Personal Loan Cost You?
Before you take out a personal loan, it’s important to calculate the costs.
What will your monthly payment be? How much interest will you pay?
This Personal Loan Calculator helps you answer these questions. All you do is input the four required variables – the loan amount or purchase price, down payment, annual interest rate, and the number of monthly payments – and the calculator does the rest by making the complicated math easy for you.
Below are helpful tips about personal loans so you can decide if one is right for your situation.
Personal Loans 101
A personal loan is an unsecured loan, which means that the borrower does not have to put up any security or collateral to guarantee the repayment of the loan.
Personal loans are commonly used for a number of different purposes including:
You can use a personal loan for just about any need you have.
Personal loans can be easy to get but usually come with high interest rates. Before you apply for a personal loan, ask yourself if you really need the money and if you’ll be able to pay back the debt.
This Personal Loan Calculator can give you much of the information you need to make the best possible choice for your situation.
Tip: Try adjusting your down payment to see how it affects your monthly payment and total interest cost. What if you used some of your savings as a down payment instead of borrowing the full amount you need? How much money would you save?
When Should You Use Personal Loans?
Personal loans are helpful during times of financial stress when you don’t have an emergency fund. They usually don’t require guarantors and the approval process is fast – but remember, the price you pay for this convenience is a high interest rate.
Interest rates for personal loans can rise up to 15-25% per year. However, this can be better than credit card interest rates. This is one of the reasons why personal loans are often used to pay off credit card debt.
When Should You NOT Use Personal Loans?
The problem with a personal loan is the high interest rate.
For this reason, you should pursue alternative lending sources that result in lower financing costs before taking out a personal loan.
For example, mortgage financing secured by your principle residence is usually more affordable than a personal loan. Similarly, auto financing secured by the title on your vehicle is usually a better deal than an unsecured personal loan.
Since personal loans usually are taken in response to financial emergencies, it is better to plan ahead and build an emergency fund for these “unexpected” events rather than incur the high costs of paying later at very high interest rates.
However, if you’re already past that point and in financial stress right now then at least make sure you shop aggressively for your personal loan to get the best deal.
Another tip for personal loans is to never use them to fund discretionary purchases. After all, what is the point in having a luxurious gadget if you cannot enjoy it without worrying about how you’ll repay the debt? Stated simply, if you cannot pay cash for your luxuries, it simply means that you cannot afford them. In this situation, a personal loan is no solution.
Let’s summarize some of the key points regarding personal loans:
Keeping these qualities in mind, use the Personal Loan Calculator to wrestle with your personal loan options and make a smart decision for you and your family.
Personal Loan Calculator Terms & Definitions
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