The Personal Loan Payment Formula
Monthly Payment (M) = P × [r(1+r)^n] / [(1+r)^n - 1] where: P = Principal loan amount, r = Monthly interest rate (APR divided by 12), n = Total number of monthly payments. For a $12,000 loan at 10% APR over 36 months: r = 10%/12 = 0.8333%, n = 36. M = $12,000 × [0.00833 × (1.00833)^36] / [(1.00833)^36 - 1] = $387.21.
Personal loan monthly payments across amounts, rates, and terms
| Loan | APR | 36-Month Payment | 48-Month Payment | 60-Month Payment |
|---|---|---|---|---|
| $5,000 | 8% | $156.68 | $122.06 | $101.38 |
| $10,000 | 10% | $322.67 | $253.63 | $212.47 |
| $15,000 | 12% | $498.22 | $394.84 | $333.67 |
| $20,000 | 15% | $693.31 | $556.61 | $475.80 |
| $30,000 | 18% | $1,085.50 | $883.18 | $761.85 |
For a rough estimate of monthly payments: multiply your loan amount by 0.03 for a 36-month loan at approximately 10-12% APR. This gives you a ballpark within 5-10% of the actual payment. Always verify with the exact calculator.
Understanding Amortization: How Each Payment Splits
Each monthly payment contains two components: interest (charged on the remaining balance) and principal (reducing the balance). Early in the loan, most of your payment is interest. Late in the loan, most is principal. This is amortization. The total payment stays constant; what changes is the interest/principal split.
Amortization schedule sample: $10,000 at 10% APR over 36 months
| Month | Payment | Interest Portion | Principal Portion | Remaining Balance |
|---|---|---|---|---|
| Month 1 | $322.67 | $83.33 | $239.34 | $9,760.66 |
| Month 6 | $322.67 | $79.56 | $243.11 | $8,701.73 |
| Month 12 | $322.67 | $73.86 | $248.81 | $7,614.32 |
| Month 24 | $322.67 | $56.74 | $265.93 | $4,945.31 |
| Month 36 | $322.67 | $2.68 | $320.00 | $0 |
How Origination Fees Change the Real Cost
An origination fee reduces the amount you actually receive while keeping your repayment amount the same. If you borrow $10,000 with a 3% origination fee ($300), you receive $9,700 but repay $10,000 plus interest. This fee effectively raises your actual APR above the stated rate. Always ask whether origination fees are included in the advertised APR — by law they should be.
Calculate Your Exact Loan Payment
Enter your loan amount, interest rate, and term for a complete amortization breakdown.