Personal Loan Calculator

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The Personal Loan calculator is a tool for consumers to use in figuring out their debt burden when performing any kind of loan transaction. These loans may take the form of mortgages, auto loans, credit cards, and student loans. The calculator takes into account all the terms of the loan and tells you your monthly payment to pay the debt off in the specified time. The advanced mode tells you how much of what you paid went to interest.

Example: To pay off a debt of $1000 at 3% interest in six months, you will need to make a monthly payment of $168.13, after which you will have paid $8.77 in interest.

For a more practical real-world example, let's say you have Student Loan debt of $35,000, at 4.29% fixed rate interest. If you're keen to pay it off in 10 years, that's a monthly payment of $359.20, paying over $8K in interest. If you're fortunate enough to pay it off in two years, that's $1524.39 monthly payment and only $1585.46 in interest.

Different Loans and Terms

You may be wondering why different kinds of debt have different interest rates. The difference is a secured vs. unsecured loan. When buying a new car and making payments, you're actually taking out a loan and putting up the car as collateral. With a mortgage, you're putting up your house - as the 2007 Subprime Mortgage Recession demonstrated.

Student Loans and credit cards, on the other hand, are unsecured loans, with nothing to back them up but your good word. Because the loaning agency is taking on more risk, they charge a higher interest rate. Credit cards are also termed as a type of revolving loan. The interest rate on them is so high because you can run up a charge literally any time, and there's no set time period to pay it back beyond the minimum monthly payment.

Personal loans are also typically unsecured. There are all kinds of reasons people take out personal loans - sometimes to recover from a setback such as hospital bills or a disaster, or other times it's a small business loan for budding entrepreneurs.

Consumer Debt Statistics

Consider the debt situation in the US as recently as 2018, according to the US Federal Reserve.

	Total US consumer debt: $3.898 trillion
	Average per-capita debt: $11,880
	Credit card debt is 27% of total consumer debt
	Two in ten adults say they roll over $2.5K or more per month in debt
	Student Loans total $1.524 trillion

So this are a sobering view of the US economy. If you're carrying less of a debt burden than what these statistics show, congratulate yourself. And use our calculators to manage your money wisely!

Personal Loan Calculator

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