Loan Calculator

Ensure you can afford a loan for debt consolidation, big purchases, home projects, and other needs.

Getting a loan at the right interest rate with the right term can affect how easy (or difficult) it is to repay a loan. Rates and terms affect how much you pay each month and the total cost of borrowing. This loan calculator can help you find the right loan to fit your needs and budget. It also helps you assess how extra or larger payments can help you save money.

Are you getting a personal loan for the right reasons?

Personal loans can be a useful tool to help you achieve key financial goals. But as with any financing, you want to ensure you get a loan for the right reasons. Here are some common reasons people use personal loans:

  • Debt consolidation: Paying off existing debt, such as credit cards, back taxes, and other loans
  • Home improvement: Fund major projects to improve a home that you own
  • Major purchases: Get a lower interest rate on a major purchase, such as furniture or electronics
  • Medical expenses: Fund a procedure or pay a bill that was not covered by your insurance
  • Moving and relocation: Get money to cover expenses to move to a different city or state
  • Major life events: Use the funds to pay for a vacation, a wedding, or another major event

What you want to avoid is using funds from a personal loan to cover basic living expenses and bills. Like with credit cards, using a loan to cover expenses in your budget will usually lead to financial hardship. The loan only delays the inevitable: you can’t afford to cover your expenses with income.

Be careful with using loans for debt consolidation

Using a personal loan to consolidate debt can be beneficial but can lead to bigger challenges. If you use the loan to pay off your balances and immediately accumulate new balances before you pay the loan off, you can end up with more debt instead of less.

For a loan to work for consolidation, you must balance your budget to stop making new charges. Otherwise, you will have new balances to pay and the loan.

Choosing the right term on a loan

term is the length of time you have to repay a loan.

  • Choosing a shorter term increases the monthly payment requirement but decreases total costs, helping you save money overall.
  • Choosing a longer term decreases the monthly payment requirement but increases total costs, making a loan more affordable.

Lenders offer different terms on different types of loans. So, while 30 years is a standard term for a mortgage, it’s unlikely that you’ll find a personal loan or auto loan with that long of a term.

Type of LoanCommon Terms
Mortgage30 years is the most common, but you can also get 10, 15, and 20-year terms.[1]
Auto loans72 months is currently the most common term, although terms have been getting longer; some lenders offer 84-month terms.[2]
Personal loansMost lenders cap personal loans at 48 months, although some offer up to 60 months.
Student loansFederal student loans and most private loans have a term of 10 years (120 months); some private loans offer longer terms of up to 25 years to give you more time to pay the balance off.[3]

Tip: Always choose the shortest term you can afford to pay

Increasing the loan term to lower the payments makes sense. You want to ensure you can afford the monthly payments without stressing your budget. However, extending the term further just to drop the payments even more isn’t a good long-term financial strategy. Paying off a loan as quickly as possible will minimize the total cost, saving money overall.

Getting the right interest rate

Regarding the interest rate applied to your loan, lower is always better. Lenders assign interest rates for loans based on your credit score. A higher credit score means you enjoy lower interest rates. Lower rates reduce both the monthly and total costs of your loan. So, getting a lower rate is a win-win.

Different types of loans have different average rates. Mortgages tend to have the lowest rates, but even a 1% difference in the rate on such a large loan can equate to thousands of dollars in additional cost.

Type of LoanAverage rates
MortgageMortgage rates tend to average between 6% and 7%.[4]
Auto loansAuto loans tend to average from 6.7% to 18.95%.[5]
Personal loansRates on unsecured personal loans average between 10.73% and 32%.[6]
Student loansFederal student loan rates sit at 6.53% on undergraduate loans, 8.08% for graduate or professional loans, and 9.08% for PLUS loans.[7] Private loans range from 4% to 17%.[8]

Federal student loan interest rates are not based on your credit

Unlike other loans, you don’t qualify for a better federal student loan interest rate if you have excellent credit. Rates for federal loans are set each year in the summer, usually on July 1. They get set based on the 10-year Treasury Note Index.

This can be both good and bad. If you don’t have good credit or haven’t started building credit yet, this allows you to qualify for a decent rate you might not get otherwise. But if you have excellent credit, you might qualify for a lower rate with a private loan. Remember that private loans aren’t eligible for federal repayment plans or forgiveness programs.

Adjustable-rate loans may offer better rates now, but be careful!

Not all loans have fixed interest rates. Adjustable-rate loans have rates that can change over time, usually after a set number of years. For example, the rates on an adjustable-rate mortgage usually adjust every 1, 7, or 10 years.

ARMs can help you get lower rates, especially when rates are low. When the Federal Reserve lowers the benchmark federal funds rate, rates on all types of loans (besides federal student loans) tend to decrease. However, your adjustable-rate loan may become less beneficial if rates go up again. You could end up with higher rates than if you’d just take the fixed rate at the beginning of your loan.

When rates are low, consider refinancing to a low fixed rate

Paying attention to what’s happening with interest rates can be beneficial because you can refinance loans to secure a lower fixed rate. Mortgages and auto loans can both be refinanced. Personal loans can also be refinanced, and you can even use a debt consolidation loan to consolidate them with high-interest-rate credit card debt.

Even student loans can be refinanced, but only through a private lender. You can’t refinance federal loans to get a lower interest rate. You must convert the debt to private, making you ineligible for federal relief options.