The general-purpose loan calculator. Same math the bank uses, applied to your inputs.
| Term | Monthly | Total interest | Total paid |
|---|
An installment loan is a borrowing contract with a fixed principal, a fixed APR, and a fixed end date. Every monthly payment is split between two things: interest accrued on the remaining balance, and principal that retires the debt. Early in the loan, most of the payment is interest because the balance is large; late in the loan, almost all of it is principal because the balance is small. The math that ties payment, rate, term, and principal together is one closed-form equation lenders have used since the 19th century.
M — monthly paymentP — principal (loan amount)r — monthly rate (annual APR ÷ 12, in decimal)n — total number of payments (years × 12)Total interest is simply M · n − P. The interest portion of any single payment is balance · r; the principal portion is M − (balance · r). That recursion, applied month by month, is the amortization schedule.
Lenders price every loan to expected default risk, and FICO is the dominant signal. Typical 2026 rate ranges for a 5-year unsecured personal loan, drawn from Bankrate and Experian rate surveys and the Federal Reserve G.19 consumer credit release:
| FICO band | Typical APR | Monthly on $25k / 5yr | Total interest |
|---|---|---|---|
| Excellent (760+) | 8 – 11% | $507 – $544 | $5,400 – $7,600 |
| Very good (720–759) | 10 – 13% | $531 – $569 | $6,900 – $9,100 |
| Good (690–719) | 13 – 17% | $569 – $621 | $9,100 – $12,300 |
| Fair (630–689) | 17 – 23% | $621 – $704 | $12,300 – $17,300 |
| Subprime (<630) | 24 – 36% | $719 – $903 | $18,200 – $29,200 |
Same loan, same term, double the cost. A 75-point FICO improvement (from "good" to "excellent") on a $25k / 5-year loan is worth roughly $4,000 of interest. That's the financial value of paying cards down to under 30% utilization for six months before applying.
The longer the loan, the more months interest compounds, and the smaller the share of each payment that retires principal. The same $25,000 at 8.5% APR across common terms:
| Term | Monthly | Total interest | Total paid |
|---|---|---|---|
| 2 years | $1,137 | $2,283 | $27,283 |
| 3 years | $789 | $3,406 | $28,406 |
| 4 years | $616 | $4,580 | $29,580 |
| 5 years | $513 | $5,783 | $30,783 |
| 7 years | $396 | $8,260 | $33,260 |
The standard borrowing rule: pick the shortest term whose monthly payment leaves your back-end DTI under 36% and your savings rate intact. Stretching to 7 years cuts the monthly by 23% but adds 43% to interest cost. The lower-monthly framing is always a cash-flow trade, not a savings.
Two loans with identical "rates" can have very different true costs once origination fees, broker fees, and required insurance are factored in. Reg Z (Truth in Lending Act, 12 CFR 1026) requires every consumer loan to disclose APR — that's the only number worth comparing. A 4% origination fee on a 5-year loan adds about 1.7 points to APR; on a 3-year loan it adds about 2.7. The shorter the term, the more origination math hurts.
Refinancing a 5-year loan with 3 years left into a fresh 5-year loan can lower the monthly payment even at the same rate — but you've added 2 years of interest, and total cost goes up. The honest test for any refinance: does the new total of (new payment × new remaining term + fees) beat the existing remaining cost? If not, you're trading future cash for present cash, not saving anything.
Financing depreciating assets (cars, electronics, furniture, vacations) means you pay both the principal and the interest on something that is worth less every month. Borrowing for appreciating or income-producing assets (a home, education with realistic ROI, a business) is a different calculation. The framing matters more than the math.
If your DTI is high, the answer is rarely "consolidate into a longer loan." That works only if you actually destroy the cards or close them. Otherwise the consolidation lowers utilization, your FICO rises, your credit limits get raised, and 18 months later you're carrying both the loan and fresh card balances. The CFPB's debt consolidation guidance is explicit about this trap.
Sources: Federal Reserve G.19 Consumer Credit release (commercial-bank personal-loan rates), Bankrate and Experian rate surveys (FICO-band APR ranges, 2025-26), Truth in Lending Act and Reg Z (12 CFR 1026) for APR disclosure mechanics, CFPB Consumer Lending guidance on debt consolidation and prepayment, FICO 8/9/10T scoring methodology for credit-tier definitions.
The interest rate is the cost of borrowing the principal alone. APR bundles in mandatory finance charges — origination fees, broker fees, certain insurance — and re-expresses everything as an annualized rate, so two loans with different fees compare apples-to-apples. Reg Z (12 CFR 1026) requires US lenders to disclose APR alongside the note rate on every consumer credit transaction. On a 5-year loan, a 4% origination fee adds about 1.7 percentage points to APR.
For unsecured personal loans in early 2026, typical APR ranges per Bankrate and Experian surveys: FICO 720+ around 8-12%; 690-719 around 13-17%; 630-689 around 18-23%; under 630 often 24-36%. Rates remain elevated because the Federal Reserve's policy rate did; the 24-month commercial-bank personal-loan rate from Federal Reserve G.19 has been around 11-12% through 2025-26. Secured loans (auto, HELOC) price 3-7 points lower because collateral reduces lender risk.
Shorter terms cost less in total interest but raise the monthly. At $25,000 / 8.5%: a 3-year loan costs $3,400 in interest at $789/month; a 7-year loan costs $8,200 at $396/month. The right answer depends on cash flow, not feeling. Standard rule: pick the shortest term whose monthly fits comfortably below your DTI ceiling — back-end DTI under 36%, ideally under 28% for unsecured debt.
A secured loan is backed by collateral the lender can claim if you default — auto loans by the car, HELOCs by the house, share-secured by a savings account. An unsecured loan (most personal loans, credit cards, student loans) has no collateral; the lender's only recourse is collections and credit damage. Secured APRs are 3-7 points lower, but the consequence of default is losing the asset. Never secure a low-stakes consumer purchase against an asset you can't afford to lose.
Most lenders deduct the origination fee from the disbursement, not the loan amount. Sign for $25,000 with a 4% fee, you receive $24,000 but owe $25,000 plus interest. The APR disclosure under Reg Z accounts for this — that's why APR is higher than the note rate when fees exist. Compare the APR (not the rate) and the cash-in-hand amount. A 9% rate with no fee is usually cheaper than a 7% rate with a 5% origination fee on terms under 5 years.
Almost always. Most US personal loans are simple-interest amortizing — every extra dollar reduces the principal interest accrues against tomorrow. Adding $50/month to a $25,000 / 5-year / 8.5% loan saves about $620 of interest and pays it off 6 months early. Confirm two things first: the loan has no prepayment penalty (rare on personal loans, sometimes present on older auto loans), and you have no higher-rate debt — if a card is at 22%, every extra dollar belongs there first.
The framework underwriters use to price every loan: Character (FICO, payment history, length of credit), Capacity (DTI, employment, income), Capital (down payment, savings, reserves), Collateral (the asset securing the loan, if any), and Conditions (loan purpose, market rates, economic environment). All five inputs your offered APR. Improving any one — paying down a card, putting more money down, choosing a shorter term — moves the rate down.
Always prequalify first. Prequalification uses a soft pull — estimated rate and amount, no FICO impact. Preapproval and the formal application use a hard pull, dinging your score 3-7 points for ~12 months. Most lenders let you prequalify with 2-4 competitors in an afternoon. Then run only one hard pull on your pick. FICO 8 and newer treat multiple hard pulls within 14-45 days for the same loan type as a single inquiry — so cluster auto and mortgage shopping inside that window.
APR is the annualized cost of borrowing, used on loans (Reg Z / Truth in Lending Act). APY is the annualized return on a deposit, used on savings (Reg DD / Truth in Savings Act, 12 CFR 1030). APY accounts for compounding; APR doesn't. The two terms exist because they sit on opposite sides of a bank's balance sheet. Always compare APRs across loan offers and APYs across savings accounts — mixing them gives a misleading picture.
Refinance only if the new APR is materially lower (rule of thumb: at least 1 percentage point on personal loans, 0.5-0.75 on mortgages) and you keep the term equal to or shorter than the remaining time on the old loan. Extending the term to lower the monthly — the "reset trap" — usually increases total interest paid even at a lower rate. The honest test: does (new payment × new term + fees) beat the existing remaining cost? If not, you're trading future cash for present cash, not saving.