How the Loan Calculator Works
This calculator uses the standard loan amortization formula lenders use to determine your monthly payment:
M = P × [r(1+r)n] / [(1+r)n − 1]
- M = Monthly payment
- P = Loan principal (amount borrowed)
- r = Monthly interest rate (APR ÷ 12)
- n = Total number of payments (months)
Each payment you make splits between interest (calculated on the remaining balance) and principal. Early in the loan, more of your payment goes to interest. As the balance shrinks, more goes to principal — that's how amortization works.
Average Personal Loan APRs by Credit Score
Rates vary significantly by credit tier. Use these ranges to get a realistic APR estimate:
| Credit Score | Tier | Average APR | Sample $15K / 60mo |
|---|
| 740+ | Excellent | 6.99% – 10.99% | $297 – $326 |
| 670 – 739 | Good | 10.99% – 15.99% | $326 – $365 |
| 580 – 669 | Fair | 17.99% – 25.99% | $381 – $449 |
| Under 580 | Bad | 25.99% – 35.99% | $449 – $542 |
Representative rates based on industry averages. Your actual rate will depend on income, debt-to-income ratio, and lender.
Frequently Asked Questions
How is the monthly loan payment calculated?
Monthly payment uses the amortization formula M = P × [r(1+r)n] / [(1+r)n − 1]. P is principal, r is the monthly rate (APR ÷ 12), and n is the number of months. Our calculator does this automatically — just adjust the sliders.
What is a good APR for a personal loan?
Depends on your credit. Excellent credit (740+) qualifies for 6.99%–10.99%. Good credit (670–739) gets 10.99%–15.99%. Fair credit (580–669) sees 17.99%–25.99%. Below 580, expect 25.99%–35.99%.
Does the calculator include origination fees?
This calculator shows the payment based on APR and term. Origination fees (typically 1%–8%) are deducted from the amount you receive but are already baked into the quoted APR. Always compare APR, not just the interest rate.
How can I lower my monthly payment?
Three levers: (1) Extend the term — lower payment but more total interest. (2) Lower the APR — improve your credit score, add a co-signer, or shop multiple lenders. (3) Borrow less. Try each in the calculator to see the exact impact.
Can I use this for auto loans or mortgages?
Yes — the math is the same. Set the amount, APR, and term. For mortgages, use terms of 180 months (15 years) or 360 months (30 years). Note: mortgage calculators usually also factor in property taxes and insurance, which this calculator doesn't include.