Unsecured Loan Calculator

How this unsecured loan calculator works

This tool models a standard fixed-rate, fully amortizing unsecured personal loan. That means:

• Your interest rate (APR) stays the same for the life of the loan.
• Your required monthly payment is fixed.
• Each payment includes interest plus principal, and the balance gradually falls to zero.

Payment formula

For a loan with principal \(P\), monthly interest rate \(r\) and number of payments \(n\), the fixed monthly payment \(M\) is:

The calculator converts your APR to a monthly rate, computes the payment, then builds a month‑by‑month amortization schedule showing how much of each payment goes to interest vs. principal.

Origination fees and effective APR

Many unsecured loans charge an origination fee, for example 3–8% of the loan amount. Lenders often deduct this from the amount you receive, but you still pay interest on the full principal.

This calculator lets you enter the fee as a percentage or a fixed dollar amount. It then:

• Shows the fee separately.
• Adds it to your total cost of borrowing.
• Estimates an effective APR based on the net cash you receive vs. the payments you make.

Extra payments and early payoff

If your lender allows prepayment without penalty, adding a fixed extra amount to each monthly payment can dramatically reduce your total interest.

When you enter an extra monthly payment, the calculator:

• Rebuilds the amortization schedule with the extra principal applied each month.
• Shows the new payoff time in months.
• Calculates how much interest and time you save compared with making only the required payment.

How to use the unsecured loan calculator

1. Choose your mode. Use “Find payment” to see what your monthly payment would be for a given loan amount and term. Use “Find amount” to see how much you can borrow for a target payment.
2. Enter loan amount or payment. Type the number directly or drag the sliders for quick what‑ifs.
3. Set APR and term. Enter the quoted APR and choose the term in years or months.
4. Add fees and extra payments (optional). Include any origination fee and a recurring extra payment if you plan to pay more than required.
5. Review the summary. Check the monthly payment, total interest, total cost, and effective APR.
6. Open the amortization schedule. Expand the table to see how your balance falls over time.

What is an unsecured loan?

An unsecured loan is a loan that is not backed by collateral such as a house, car or savings account. Approval and pricing are based mainly on:

• Your credit score and credit history.
• Your income and employment.
• Your existing debts and debt‑to‑income (DTI) ratio.

Common examples include personal loans, debt consolidation loans, medical loans and some student loans. Because the lender has no collateral to seize if you default, unsecured loans usually have higher APRs than secured loans.

Factors that affect your unsecured loan rate

• Credit score: Higher scores usually qualify for lower APRs and larger amounts.
• Debt‑to‑income ratio: Lenders look at how much of your income already goes to debt payments.
• Loan amount and term: Longer terms lower the monthly payment but increase total interest.
• Loan purpose: Some lenders price differently for debt consolidation vs. home improvement vs. general use.
• Fees: Origination and prepayment fees change the true cost even if the APR looks similar.

Tips for comparing unsecured loan offers

• Always compare APR, not just interest rate, because APR includes mandatory fees.
• Look at the total cost (interest + fees), not only the monthly payment.
• Check for prepayment penalties if you plan to pay the loan off early.
• Use this calculator to model each offer with its exact APR, fees and term.
• Try shorter terms and/or extra payments to see how much interest you can save.

Limitations and assumptions

This calculator assumes:

• A fixed APR for the entire term.
• Monthly compounding and monthly payments.
• No late fees, variable rates, or changes to the schedule other than your chosen extra payment.

Real‑world loan contracts may include additional fees, minimum payment rules, or compounding conventions. Always review your loan agreement and, if needed, consult a qualified financial professional before borrowing.