Personal loans are an easy-to-understand lending product offered by a range of different lenders around the nation. They’re one of the most common forms of loan available to consumers in the United States. And while these loans are fairly basic in nature, they can still be difficult to understand if you don’t have a background in finance. If you’re considering getting a personal loan, you might still find it hard to fully understand what you’re signing up for.
There are a range of different lenders to choose from, which means that you often need to compare different offers before making any decisions. One of the great modern tools that has become available to borrowers is personal loan calculators. A personal loan calculator is a calculator that computes the total cost of a personal loan and helps you receive a better break down of all the loan components involved.
They’re used by borrowers around the country to get a better understanding of what they’re signing up for when they get a personal loan. Because of how popular personal loan calculators are, there are hundreds of different ones available online.
This guide will help you better understand what a personal loan calculator is. It will also help you understand what you should be looking for when you use a personal loan calculator. It will help you make the best decision possible when deciding on which personal loan calculator to use to help compare your financing options.
What Should My Personal Loan Calculator Include?
Many people wonder what their personal loan calculator should include. There are a variety of components that dictate the full cost of a personal loan, so it’s important to understand what you should be looking for when you pick a personal loan calculator. This section of our guide will provide a breakdown of everything that you need in your personal loan calculator. Check out the components below.
This is the loan amount that you are borrowing. This is the amount of money that you will receive when you borrow from a lender. Your loan calculator should allow you to input the principal amount that you want to borrow. If you want to compare different amounts that you are considering borrowing, you can retry the calculator multiple times with different principal borrowing sums.
The most important component of any personal loan calculator is the interest rate input. If you don’t have this, there’s no point using the calculator at all! Interest rates will be the major point that influences the cost of your loan. You can use the calculator to compare various different interest rates on offer from different lenders that you are considering working with.
While most personal loan interest is calculated the same way, it’s still important to make sure that you recognize this. Check with the type of loan you are getting and read the fine details to see the way they calculate interest on the principal loan amount that you borrow. This can make a huge difference in the total cost of the loan.
Many lenders will charge you an origination fee for starting the loan. This is a one-off charge that you will need to pay back along with the amount of money that you have borrowed. The origination fee that you are charged will depend on the lender that you are using and the amount of money that you are borrowing.
Other Charges and Fees
The reality is there could be a range of other charges and fees that you have to consider when you’re applying for a loan. Have a look at the loan you are considering and see what types of fees your lender charges. There should be a section on the personal loan calculator that has space for this type of extra fee or charge. These different fees can make a huge difference in the viability of your loan, so they’re important to consider.
Best Personal Loan Calculators
If you’ve decided that you want to use a personal loan calculator, you’re probably wondering which ones are best to use. The reality is that there are plenty of great calculators out there to choose from. The only downside is that there are plenty of awful ones as well. That’s why it’s important that you know which personal loan calculators to choose.
We’ve done research to help determine the best personal loan calculators on the market. If you’re going to use a personal loan calculator, you’re best to use one to give yourself a better understanding of what kind of value you’re getting from your personal loan. Remember, there’s no harm in using a range of different calculators – trying and testing different calculators will yield better results.
Calculator.net is an online calculator company that hosts hundreds of different calculators on their website. They’re a great firm that provides in-depth analysis and calculations on a variety of different topics. One of their best calculators is their personal loans calculator, it provides users with some of the most in-depth analysis available on personal loans.
It has inputs for the original loan amount, as well as the interest rate that you have to pay on the loan. You will also need to input the loan term length and start date. There’s an entry point for insurance as well, which might come in handy if you are deciding to insure your loan, or if your lender requires you to do so.
Then there is the origination fee input, you can choose to deduct this from your loan amount or pay it upfront, it can also be determined as a percentage or fixed amount. As you can see, this calculator does a good job of offering flexibility to those who use it.
One of the best things about this calculator, aside from the variety of inputs that are available, is the amount of detail that you’re provided after the calculation is complete. It will give you a full breakdown of your costs, as well as multiple charts that show payment breakdowns and long-term financial commitments. If you want to get a visual representation of the financing process, this is an awesome option for you.
It is one of the most complex and rewarding calculators available to you on the internet. Best of all, it is not biased whatsoever as it is not linked to any bank or financial institution. This calculator is developed by calculation experts.
The Calculator Site
The Calculator Site is another online calculator company that provides various different calculators for their variety of users. This site is awesome for those who want another in-depth calculator to take a look at their personal loan. Let’s explore a bit more about what this calculator has to offer.
You can input different currencies and loan amounts, as well as annual interest rates. You then input the length of the term – this is done in months. You’ll also need to provide any extra fees that are included in the loan, as well as any initial deposit that you might have made. Lastly, you can choose to include a loan start date, as well as balloon payments for the end of the loan.
The great thing about this calculator is the variety of results that it will give you when you’re done with inputting all your information. It will breakdown all your costs and then provide you with a month-by-month analysis of your balance and the amount of interest that you’ve paid. In addition, you can also choose to see graphic representations of your information, which helps you better understand the different components of your loan.
Discover Consolidation Calculator
Discover’s consolidation calculator is perfect for those who want to see what a personal loan can do for refinancing your current debt. Personal loans are often used to refinance debt that is currently at a high interest rate. It’s one of the best ways to ensure that you don’t pay too much in interest when you don’t need to. People refinance a range of different things – auto-loans, credit cards, and other personal loans.
The Discover consolidation calculator is really good because it allows you to input nine different types of debts to consolidate. You can put in the balance you have on those debts, as well as the current interest rate you’re paying. You can also put in a payment type and monthly payment to show the speed at which you are currently paying off your debt.
The calculator will then show you the amount of money that you could be saving if you combined these debts into a personal loan. You’ll find that it can be much cheaper to use a personal loan to refinance, rather than simply continuing to pay off your debt. The reason this tool is so great is that it allows you to use so many different debts to come to your debt consolidation conclusion. Many calculators do not provide the flexibility that this calculator has.
Smart Asset Personal Loan Calculator
Smart Asset’s personal loan calculator is another great option for those who want to get a rough estimate of what their personal loan will cost them. This calculator is much more simplistic than the other calculators mentioned in this article, but it still provides the basics that you need to get a good understanding of the personal loans industry. It allows you to input loan amount, interest rate, and term.
The calculator provides you with a visual breakdown of your loan and how much you will owe. It will also give you a breakdown of how your loan balance will change throughout time. This was a feature that was featured in the first two calculators. The benefit is you have access to this feature without having to put in as much information. This calculator is definitely best for those who want to save time or those who don’t have very much information about their loan – it’s a good first stop for calculators.
Other Things to Consider
While calculators contain most of the components that you need to understand the total cost of your loan, there are still a few other things that you should consider when you’re trying to decide on which loan to get. We’ve outline some of these components in further detail below.
Early Termination Fee
If you end up wanting to pay your loan off quicker than you originally expected, you might end up having to pay a fee to do so. This may sound silly — you’re probably wondering what loan company wouldn’t want to be paid back early? But the reality is that a lender wants you to have to pay the loan back over a longer period of time because that’s how they get the interest they are due. If you pay the loan back early, then you don’t ever have to pay any interest on the remainder of the loan.
If you think there is a chance that you will pay back the loan early, check the amount that they charge for early termination – this figure could come in handy one day.
If you think there is a chance you will end up paying some of your payments past their due date, you need to consider the amount of money the lender will charge you for late fees. Remember, we highly suggest that you don’t make payments late. This will damage your credit score and impact your ability to borrow money in the future. Nonetheless, it’s an important thing to consider if you’re currently financially unstable.
Personal Loan Comparison Tool
Another feature that you should look for in a personal loan calculator is a comparison tool. Comparison tools allow you to do a general comparison of two or more loans at the same time. It’s a great way to speed up your comparison process. You can see a full breakdown of the differences between the two loans that you’re applying for.
Some loans will do the comparing for you, and provide you with data on the different amounts you can save with the different loan choices. While you can do this yourself by simply comparing your results, it can be nice to view the entire thing in a single interface sometimes.
Types of Personal Loan Calculators
There are two primary types of personal loan calculators. These different calculators are produced by two different types of companies. We’ll explore these two calculators in more detail below.
Lender Based Personal Loan Calculator
Many lenders will have their own personal loan calculator posted on their website. This type of calculator will allow you to quickly calculate the costs of a loan. These types of calculators are typically fairly basic, so you’ll want to make sure that it has all the components that you’re looking for.
You should be naturally skeptical of these types of calculators. They might try and favor the loan they are offering. Be cautious when using lender based loan calculator.
General Online Personal Loan Calculator
General online personal loan calculators come in a variety of shapes and sizes. These calculators are often some of the more advanced forms of calculator. They are created by software companies that release a variety of different calculators via the internet. These calculators are inherently non-biased, but you should still make sure they have space to include any type of fee or charge you need to include in your consideration of your personal loan.
Ask Your Lender for Total Cost
A personal loan calculator is generally used to help determine the total cost of a loan. But a calculator cannot help you estimate hidden fees and charges that your lender might include in the loan that you apply for. That’s why it’s important that you always ask your lender for a total cost of your loan before you make any agreements. Personal loan calculators are a great starting point, but you still need to take some steps to make sure that you have a full understanding of your loan.
Lenders will give you a complete breakdown which will include all the fees and charges that you are expected to pay throughout the course of your loan. You need to make sure that they include a final cost. Don’t agree to anything that isn’t fully transparent – you can’t afford to pay extra further down the line because a lender is trying to be deceptive. Many people around the country make the mistake of not being fully informed about their loans.
Calculators for Refinancing
Another type of personal loan calculator that is extremely useful for some people is one that shows the savings you can make by refinancing with a personal loan. Refinancing credit card debt or other debt with a personal loan is an extremely popular way to reduce debt. Millions of Americans have refinanced their credit card debt using this type of method. Because personal loans have much lower interest rates, using them to pay off your credit card debt means that you will end up paying your debt back at a lower rate. It also allows you to provide some structure to your debt repayments, a luxury that is not afforded with credit cards.
So, how do refinancing personal loan calculators work? They help you see how much money you will save by refinancing with different loan rates. If you input the current debt levels you have and then the new loan rates, it will help you get a better understanding of how much money you can save. This also works for debt consolidation. Many of these calculators will allow you to input multiple debts at multiple different interest rates. It’s a great way to see the amount of money that you can save by refinancing. You will surprised at how much cash certain personal loans will be able to save you.
Try a Few Different Calculators
No matter what type of loan calculator you decide to use, you should always try to use a few different calculators. The reality is that they don’t take long to use, so comparing with a group of different calculators isn’t too much of an inconvenience. It’s a great way to get a full picture of the potential financial repercussions you may face.
When you use multiple calculators, compare the results that you get. Try and see which components of each calculator are missing. This will give you a better idea of which calculator is giving you a more realistic picture.
Anyone who is in the initial phases of determining if they want a personal loan should make sure to try and use a personal loan calculator. They’re free to use and easy to find; there’s not much of an excuse for not using one. Remember, there are a variety of different calculators you can use if you want to try a few different ones to compare results.
There are also a range of other finance-based calculators that help you determine other interesting inquiries regarding loans. We mentioned one of these in this guide; you can use a calculator to see how much money you can save from refinancing your credit card debt with a personal loan. If you have a specific purpose that your personal loan will be used for, you should try and see if there is another calculator that will give a more in-depth picture of what you’re looking for.
If you do decide that you want to get a personal loan, we suggest that you look at a variety of online lenders. Many online lenders have provided great financing to people of diverse credit backgrounds. We’ve got a list of suggested lenders that can be found through the homepage of our website. We have thoroughly researched the industry to help you partner with lenders that will be great financing partners.
Using a personal loan calculator should be just one of the various things you do to prepare for applying for a personal loan. Any financial decision you make should be done with great thought and care. Give yourself the time you need to find the best lender for your particular situation!
Even not with personal loans, knowing how much you pay and where it’s going is very important. Through this FAQ, learn how you can calculate a number of things related to your personal loan.
General Information on Calculating Personal Loan and Qualifications for It
In this section, you would be provided with information on calculating personal loans and other calculation-related qualifications for this type of loan.
How is personal loan calculated?
It’s not calculated but instead presented as a nominal amount. A personal loan is a debt instrument utilized by people to obtain financial relief.
What is a good personal loan interest rate?
Lenders generally charge anywhere from 3% to 40% APR or personal loans depending on your credit rating. So, if you’re charged more than 40% APR regardless of your score, it’s considered high.
How do banks calculate interest on personal loans?
Aside from interest-only loans, banks compound the interest for all loans. That means you’re likely to pay more in interest for longer-termed loans.
How much personal loan can I get?
How much you’d be able to loan will depend on many factors such as credit rating, income, the lender’s maximum loan amount, and many more. The general rule is, the lower your income and credit score, the lower you can borrow.
How much salary is required for personal loan?
This would vary from one lender to another. A lot of creditors don’t have minimum income requirements, while in others, it can be as high as $60,000 a year.
How do I calculate debt to income ratio for personal loan?
You can get your debt to income ratio simply by dividing your total existing debt by your annual income.
How do I calculate personal loan amount based on salary?
There’s no standardized way of calculating your loan amount based on salary. However, if you want to have an idea, you may input some details in an online calculator to get an estimate on how much you may be able to borrow.
How do I calculate credit score for personal loan?
Your credit score is a product of a complicated algorithm used by the credit reporting bureaus, and this algorithm is not divulged to the public.
Formulas and Methods on Calculating your Personal Loan
By answering the questions below, you will have a clearer understanding of how debt works.
How do I calculate payments on a loan?
Follow this formula:
P = A/D
A is the amount loaned
D is the discount factor [(1 + i) ^n] – 1} / [i(1 + i)^n]
n is the total number of payments
i is the annual rate divided by the number of payment periods in a year
How do I calculate monthly installment for personal loan?
Using the formula above, divide i by 12 (because there are twelve months in a year). For example, if the annual rate is 12%, your i would be 1% or 0.01.
How do I calculate interest on personal loan in Excel?
Use the PMT formula in Excel. In using the PMT formula, you would need the following:
Rate – the interest rate per period. For example, if the loan is paid every quarter, divide the annual rate by 4.
Nper – the number of payment periods for the life of the loan. For example, if it’s a five-year loan paid quarterly, there would be 20 payment periods.
Pv – This is the principal amount loaned. It’s always in negative as it indicates that it is the amount owed.
Then, multiply the resulting amount by nper and subtract to the amount loaned to get the interest for the loan.
How do I calculate compound interest on personal loan?
Follow the formula below:
A = P (1 + r/n) (nt)
A = the future value of the loan, including interest
P = the the loan amount
r = the annual interest rate (in decimal)
n = the number of times that interest is compounded per year
t = the loan term in years
Once you get the future value of the loan, simply subtract the loan amount to get the compound interest on your personal loan.
How do I calculate daily interest on a personal loan?
Assuming an interest-only loan, simply divide the annual interest rate (in decimal form) by 365. Then, multiply that by the amount loaned.
How do I calculate effective interest rate for personal loan?
To calculate the effective interest rate on a personal loan, follow the formula below:
r = (1 + i/n)n + 1
where i is the nominal interest rate and n is the compounding periods per year.s
For a nominal interest rate of 6%, the effective interest rate is 6.17%.
How do I calculate personal loan outstanding balance?
As you already know how to get your monthly payment, simply multiply this amount by the number of payment periods left.
How do I calculate principal and interest on a personal loan?
Follow the formula below:
((interest rate )/(number of payments))x loan principal =interest
Once you get the interest, subtract it from your monthly payment to get the principal. If you deduct the principal paid already from the loan principal, you can do the same for the subsequent payments to get the breakdown between principal and interest.
How much are payments on a 50000 loan?
Assuming a monthly payment and 6% APR for a 10-year term, your payment would be $555.10 a month.
How much is the monthly payment on a 25000 loan?
Your monthly payment would be $483.32 for a $25,000 5-year loan with 6% APR.
How much would payments be on a 30000 car loan?
With 4.5% interest rate and $5,000 down payment, you will pay $466.08 a month on your auto loan.
Other Related Questions
Below are questions that are not directly concerned with calculating personal loans, but are still of concern to those wanting to get a great deal on their personal loan.
Which bank gives lowest interest rate for personal loan?
Based on reviews of the best personal loans, only Citizens Bank made it to the list, the others were online alternative lenders. With that information, it is safe to deduce that Citizens Bank generally has the lowest rates among banks.
How do you calculate APR on a loan?
You don’t. It is actually one of the few things that your lender advertises to entice borrowers. Before you give the loan agreement a go, you will be informed of the APR as well.
Robert is our in-house expert on personal loans and finance. He got an MBA, specializing in Finance, before joining the workforce. After working for multiple Fortune 500 companies in the past decade, he brings a wealth of knowledge and experience to the table.