Personal Loan Calculator

What a personal loan is

A personal loan is a fixed sum repaid in equal instalments over a set term, typically two to seven years, and usually unsecured — meaning it is granted against your credit record rather than against an asset. That makes it more expensive than secured borrowing but far cheaper than carrying a credit card balance, which is why consolidating card debt into a personal loan is one of its most common uses.

The formula behind it

The monthly payment is P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1), where P is the amount borrowed, r the monthly rate and n the number of payments. Borrowing 15,000 at 9% over four years gives a payment of about 373 and total interest near 2,900. Since the payment is fixed, the cost is knowable from the first day — unlike revolving credit.

How to use this calculator

Enter the loan amount, the interest rate and the term in years. The result shows the monthly payment, the total repaid and the total interest. Compare terms carefully: extending from three years to five lowers the monthly payment noticeably while raising total interest substantially.

Borrowing well

Your rate depends heavily on your credit record, so check and correct your file before applying. Use the APR rather than the headline rate to compare lenders, since arrangement fees vary widely. Prefer the shortest term whose payment you can comfortably sustain, and check whether early repayment is allowed without penalty — the ability to clear the loan ahead of schedule is worth a great deal if your circumstances improve.