Calculate the rate and monthly payment on a personal loan.
Looking to consolidate credit card payments at a lower rate? Need money for a home improvement project, car repair or special event, like a wedding? A personal loan may be the ideal solution, because you can usually get funds quickly without putting up collateral such as your home. This is known as an unsecured loan. Enter the inputs in our calculator to estimate monthly payments and how much you might pay in interest.
Some personal loans also come with a fixed rate, meaning the interest rate does not change throughout the repayment period. Those with higher credit scores may receive lower rates on a personal loan, though your rate is usually based on a number of factors related to your financial situation.
Not sure what exactly the outputs of the calculator mean? Here's a breakdown:
Estimated Monthly Payment: This is an estimated amount that you could expect to pay each month for the duration of your loan. This includes payments on both the principal of the loans as well as interest and any fees associated with it. Longer-term loans may offer lower monthly payments than shorter terms, however you would ultimately end up paying more in interest charges.
Loan Term: This is the amount of time the theoretical loan would last. You would be responsible for paying back both the principal as well as all interest and fees by this time.
Total Principal Paid: This is the base amount you would need to pay back excluding interest and fees, although some lenders do not charge any fees.
Total Interest Paid: This is the sum of all interest and fees that would need to be paid by the end of your loan. This is based primarily on the APR entered into the Interest Rate section of the Personal Loan Calculator.
APR: This is an interest rate calculated on an annual basis and expressed as a percentage. Borrowers with higher credit scores tend to qualify for lower APR rates, however other factors such as your credit utilization ratio may be considered.
You can read up on the basics of personal loans to learn more about what goes into obtaining one.
You can get started at any time with a reputable lender like Discover.
If you’re interested in applying for a Discover Personal Loan, your next step would be to gather some information you'll need for your application:
Income Information: You may be required to furnish bank statements or pay stubs as income verification.
Bank Account and Routing Numbers: If you wish to have the funds directly deposited into your checking or savings account, plan to provide this information.
Balance and Account Numbers for Creditors: You will need to provide this information if you are consolidating your debt and you would like the lender to pay your debts directly.
Personal Identification and Contact Information: A state issued driver's license or ID card and/or a passport can be used to verify your identity.
There are a number of online providers, banks and credit unions that provide personal loans. Before taking out a loan, be sure to research the following:
- Reputation of the lender
- Origination fees
- How long you have to pay back the loan
- If your lender will be able to pay back creditors directly when consolidating debt
- Can you return the loan in 30 days without paying interest
A personal loan is flexible in that you can choose the amount you want to borrow (up to the lender's maximum loan amount) and use it for a variety of purposes. As a result, it has become increasingly popular.
While consolidating credit card debt is probably the most common use of a personal loan, other reasons to take one out could include paying for:
- Home improvement projects
- Travel or moving expenses
- Medical debt or unplanned expenses
- Small business costs
Its versatility and the relative ease of acquiring funds without putting up collateral make it an attractive option in many cases.