Key insights:
- You could use a personal loan to cover an emergency expense, consolidate debt or help accomplish a financial goal
- Using a personal loan calculator is a great first step to understanding how much a personal loan may cost and see the impact to your budget
- Citi offers unsecured personal loans with flexible terms to qualified applicants
A personal loan calculator helps you understand how much you’ll pay for a personal loan over time, given certain conditions. If you’re unsure about the numbers, a calculator is an excellent tool for figuring out how certain variables like loan amount, estimated interest rate and loan term affect the overall cost of a personal loan.
Let’s explore what personal loan calculators commonly include, how they work and how they may help you find the right personal loan for you.
Understanding how a personal loan calculator works
Personal loan calculators typically use the loan amount, estimated interest rate and loan term to calculate your estimated personal loan payment.
1. Personal loan amount
This section is where you enter your loan amount. Some personal loan calculators have a default number, which could serve as a good starting point if you're unsure exactly how much you need to borrow. However, if you do know how much you want to borrow, be sure to change it to that amount.
2. Personal loan interest rate
In this field, you enter the interest rate you estimate the loan will have. If possible, try to enter your expected annual percentage rate (APR), which accounts for your interest rate and fees. The APR is typically a better way to determine your total loan cost than the interest rate alone.
3. Personal loan term
The loan term field lets you choose the amount of time you have to repay the loan. A longer term tends to mean lower monthly payments but it also leads to more total interest paid, therefore increasing the overall loan cost. A shorter term may lead to higher monthly payments but it reduces the total amount of interest you pay.
How do you calculate a personal loan payment?
After you enter all the numbers, a personal loan calculator might display a monthly payment amount, the total interest paid, and the overall cost of the loan.
Let’s say, say you need a $20,000 loan, and your estimated interest rate is 12%. Here’s what you would pay with a 3-year repayment term compared to a 5-year term:
Monthly loan payment calculator: 3-year term
| Loan Amount | $20,000 |
| Loan Term (years) | 3 |
| Interest Rate | 12% |
| Total Interest Paid | $3,914.30 |
| Total Repayment | $23,914.30 |
| Monthly Payment | $664.29 |
With this plan, you would pay $23,914.30 on a $20,000 loan. Your monthly payment estimate would be approximately $664, and you would pay $3,914.30 in interest over the life of the loan.
Monthly loan payment calculator: 5-year term
| Loan Amount | $20,000 |
| Loan Term (yrs) | 5 |
| Interest Rate | 12% |
| Total Interest Paid | $6,693.34 |
| Total Repayment | $26,693.34 |
| Monthly Payment | $444.89 |
With this plan, you would pay $26,693.34 on a $20,000 loan. Your monthly payment estimate would reduce to approximately $445, but you would pay more in interest, totaling $6,693.34, by the end of the loan term.
After your personal loan calculation
After calculating your personal loan payment and understanding your desired terms, it's time to find a personal loan. You can apply for a personal loan with traditional banks, online lenders or credit unions.
Once you pick a lender, you typically need to provide basic information like your name, address and Social Security number, as well as documents showing your income. If you’re approved, the amount of time it takes to get your funds can vary by lender.
Are Citi’s personal loans right for me?
Citi offers unsecured personal loans with flexible terms to qualified applicants. You may also use pre-qualification to get a better sense of your eligibility, and if so, what your loan terms might look like. Pre-qualification will not impact your credit score, and you may use those estimates to help understand the potential costs of borrowing. If you think you could benefit from a Citi® Personal Loan, you may apply online today.
FAQs: Personal loan calculators
Why use a personal loan calculator?
It can be hard to understand whether a personal loan may help you if you don’t know the potential costs. A personal loan calculator can help you visualize how much you may have to pay every month and over the long term, making it easier to plan for repayment. You may also easily adjust the numbers, allowing you to find terms that fit into your plans.
How do I calculate my personal loan’s monthly payment?
Your personal loan payment can be calculated using your loan amount, APR and loan term. Using a personal loan calculator can help you easily calculate monthly payments, as well as how much you’ll pay in interest and overall.
How does my credit affect my monthly payment calculation?
Lenders generally look at your creditworthiness when deciding what your APR will be. Stronger creditworthiness could mean you’ll pay a lower interest rate for your personal loan.
This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
