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How to Use a Personal Loan Calculator

Written by
Andrew Tavin, CFEI
Andrew Tavin is a personal finance writer who covered budgeting with expertise in building credit and saving for OppU. His work has been cited by Wikipedia, Crunchbase, and Hacker News, and he is a Certified Financial Education Instructor through the National Financial Educators Council.
Fact Checked by
Tamara Altman
Dr. Altman has over 25 years of experience in social science, public health, and market research, statistics, evaluation, and reporting. She has held positions with, and consulted for, many government, academic, nonprofit, and corporate organizations, including The Pew Charitable Trusts, the National Park Foundation, Stanford University, UCSF, UC Berkeley, and UCLA.
Read time: 6 min
Updated on September 28, 2022
young woman at desk using a personal loan calculator
Calculate the interest rate and monthly payments on your personal loan using a personal loans calculator.

When choosing which personal loan is right for you, you’ll want to be certain you can manage your monthly payments and pay the least amount of interest possible. Of course making those decisions might require math, and no one likes doing math, right?

Thankfully you can simplify that process using a personal loan calculator. For example, you could use Experian’s official loan calculator!

How the personal loan calculator works

A personal loan calculator provides a monthly payment estimate based on the loan information you enter. When calculating the total cost of your loan or comparing loan costs, you’ll first need to input the amount of money you’re borrowing (or plan to borrow).

Next you’ll enter either the interest rate or the annual percentage rate (APR). The APR is the total cost of a loan, including interest and additional fees, over the course of a year expressed as a percentage of the original amount borrowed. If a loan’s payment term is less than or greater than a year, the APR is found by multiplying or dividing the interest payment and any other finance charges so they can be expressed on an annual basis.

Thankfully, the Truth in Lending Act, or TILA, requires many lenders to express their loans in terms of APR so you shouldn’t have to make those calculations on your own.

Once you’ve entered the loan amount and APR, you can enter your loan term – or time frame of the loan – either by the number of years or months. Once you’ve done that, the calculator will provide the total amount you’ll pay, the total interest you’ll pay, and the cost of your monthly payments during the life cycle of your loan.

Other types of loan calculators

Different loan options may require different loan calculators. Experian’s personal loan calculator, for example, works best with a personal installment loan with a fixed rate, whether borrowed from an online lender, bank, or other loan option. Here are some other kinds of loan calculators:

Mortgage calculators

Mortgages are installment loans that use a home as collateral. Mortgages are often used to purchase a new home, though you can also use the equity in your home to take out a new mortgage if you need money for another purpose, like home improvements. Equity is the amount of your home you actually own, and you gain equity over the life of the loan, reaching full ownership once it’s totally paid off.

Mortgages also generally require a downpayment upfront. The downpayment is a percentage of the total cost of the home, and the more money you’re able to put down upfront, the lower the interest rate will be.

Experian’s mortgage calculator allows you to input your home price, down payment amount, loan term, and interest rate to calculate an estimate of how much your monthly payments will be and how much you’ll pay in total. The calculator also has advanced options if you want to incorporate the costs of all your homeownership expenses – including property taxes, home insurance, mortgage insurance, and homeowner’s association fees – into one lump sum.

Mortgages are complex, so a single calculator may not account for every expense associated with your home buying costs. Mortgages tend to have origination fees, which you’ll have to pay when you first take out the loan, and may also have prepayment penalties if you choose to pay off the loan early. You may also refinance your mortgage at some point in time. Refinancing your mortgage allows you to change the repayment terms on your remaining loan balance, often trading a longer payment time for smaller monthly loan payments.

Debt consolidation calculator

A debt consolidation loan is a loan taken out to pay off multiple other loans. Ideally, this new loan would have a lower interest rate and can simplify the loan repayment process, as you’ll only have to make one payment each month rather than multiple.

If you’re interested in comparing different loan offers for debt consolidation, consider checking out the OppU Debt Consolidation Calculator.

** The Loan Consolidation Calculator is made available as a self-help tool for your independent use and is intended for educational purposes only. Any results are estimates and we do not guarantee their applicability or accuracy to your specific circumstances. The results do not constitute an offer for a loan and will not solicit a loan offer.

Student loans calculator

Student loans tend to have higher interest rates than other kinds of long term loans, and many borrowers have a mix of public loans and private loans. If you’re looking to consolidate your student loans, refinance your student loans, or even just work out the best payment strategy for your situation, you’ll likely want to have a calculator at hand.

Because every student loan situation is different, it would be tough to make one calculator that could account for every borrowing situation. Instead, you could consider checking out the Federal Student Aid Office’s “Loan Simulator.”

Credit card calculator

Credit cards and other lines of credit work differently than other kinds of personal loans. You’ll be approved for a certain credit limit, which is replenished as you pay off your balance. Most credit cards have a grace period, so as long as you pay your bill in full each month before the due date, interest will not accrue.

Unlike many installment loans, however, credit cards do not have a set amortization schedule. That means if you only make the minimum payment each month while continuing to make purchases with your card, your credit card debt will continue to grow.

Experian’s credit card calculator allows you to input your current credit card balance, APR, and monthly payments so you can see how long it’ll take you to pay off your card if you don’t add additional purchases in the meantime. It also allows you to add additional cards to the calculation.

Improving your loan options

No matter how many calculators you use and which way you add up your options, you may not be able to find a low-interest loan if you don’t have good credit. If you can’t find any loan options within your budget, consider waiting until you can improve your credit score. By making all of your payments on time and paying down your debts, you can improve your credit history and, over time, you may find yourself on your way to a shiny credit report and the creditworthiness that comes with it.

If you’re looking at an emergency and you don’t have the time to turn your bad credit into excellent credit, consider borrowing from a friend or a family member or look into not-for-profit or nonprofit options like credit unions or government assistance.

A personal loan calculator can only help you understand the lowest cost and rates of your available options. If you want better personal loan rate options, you should consider improving your credit history or finding a co-signer...

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