Loan interest calculator
Updated on Jun. 24, 2025
Total interest on your loan:
Using the minimum payment, you'll pay:
$444.88
($31.78 average per month)
In total interest
Using the maximum payment, you'll pay:
$302.79
($33.64 average per month)
In total interest
How to use this calculator
The Bankrate loan interest calculator helps estimate how much interest you'll pay over the life of a loan. To use the calculator, enter the beginning balance of your loan and your interest rate. Next, add the minimum and maximum that you can afford to pay each month, then click calculate.
The results will display the total interest and the monthly average for both the minimum and maximum payment plans. By adjusting the minimum and maximum monthly payment amounts, you'll find that the more you pay each month, the less you'll ultimately pay in total interest.
Use the calculator tool to test various payment strategies and determine the repayment plan that best suits your budget.
How to calculate loan interest
Interest is the price you pay to borrow money from a lender, shown as a percentage. As you repay your principal balance each month, you also pay interest, which adds to the overall cost of your loan.
Depending on your loan, interest can be calculated in different ways, and your loan's interest structure will affect your total repayment amount. The calculator on this page assumes a simple interest structure. It's important to know the difference between simple and amortized interest when selecting a loan and calculating your rate.
Simple interest
Simple interest, which is what this calculator computes, is the easier of the two to calculate. Most short-term, fixed-rate loans have simple interest rates. To calculate the total interest you'll pay over the life of your loan, multiply the principal amount by the interest rate and the lending term in years.
Interest = Principal x Interest rate x Time (in years)
For example, if you borrow $10,000 at 6 percent interest for 3 years: $10,000 x 0.06 x 3 = $1,800 total interest
This method is typically used for personal loans with fixed terms and doesn't account for compounding or monthly payment structures.
Amortized interest
Amortized loans are more complicated. The initial payments for amortized loans are typically interest-heavy, which means that a higher percentage of your early payments go toward interest, rather than the principal loan balance. As you approach the end of your repayment term, a greater portion of your monthly payments is applied to the principal balance, and a smaller portion is applied to interest.
To calculate the amortized rate, complete the following steps:
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Divide your interest rate by the number of payments you make per year.
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Subtract that interest from your fixed monthly payment to see how much of the principal amount you will pay in the first month.
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Repeat the steps for next month's balance.
Mortgages, auto loans and student loans typically use an amortized interest structure.
Factors that affect how much interest you pay
Several factors influence the installment loan rate you're eligible for and the amount of interest you ultimately pay.
- Credit score
- The better your credit, the more likely you are to qualify for a lender’s lowest interest rate. Lenders use your credit score to estimate how likely you are to pay back a loan. If you have bad credit, you're likely to receive a higher interest rate, allowing the lender to ensure it recovers its investment even if you default on the loan.
- Debt-to-income ratio
- If you have a high amount of monthly debt compared to your income, a lender is likely to assign you a higher interest rate. If you currently have several high-interest loans, it may be worth considering debt consolidation to lower your monthly payment and simplify your bills.
- Loan amount
- The more money you borrow, the higher your interest rate will be. When you take out a large loan, the lender is taking on more risk than if you were to take out a small amount. To reduce unnecessary interest, ensure you borrow only what you need.
- Loan term
- Shorter loan terms come with higher monthly payments, but you end up paying less interest overall. Longer repayment terms may come with lower monthly payments, but you end up paying more in interest over the life of the loan.
- Type of loan
- Loans can either be secured or unsecured. Secured loans typically have lower interest rates because they're secured by collateral. However, that does mean you risk losing an asset, such as your home or car, if you fail to repay the loan. Personal loans are typically unsecured, meaning they tend to have higher interest rates than secured loans.
Use your results to choose the best loan
The calculator doesn't just tell you what you'll pay — it helps you make smarter borrowing decisions. You can compare total interest costs for different monthly payments and loan terms to understand how aggressive or flexible your repayment plan should be.
If you have room in your budget, opting for the higher monthly payment can significantly reduce the total interest you pay. Use this tool to find the sweet spot between affordability and long-term savings.
What is a good personal loan rate?
As of June 2025, the best personal loan rates start around 6.5 percent. The average personal loan rate sits higher, at around 12.65 percent. Your credit score is the single biggest factor in determining your rate.
Suppose you need to borrow $10,000 and want to select a repayment term of three years. Here's a look at how your interest rate affects your loan cost:
| Loan 1 | Loan 1 | Loan 1 | |
|---|---|---|---|
| Interest rate | 8% | 15% | 30% |
| Monthly payment | $313 | $347 | $425 |
| Total interest paid | $1,281 | $2,480 | $5,283 |
Even a few percentage points can cost (or save) you hundreds — or even thousands — over time.
Next steps for getting a personal loan
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A personal loan is a relatively easy loan to qualify for, and can be funded quickly — sometimes the same day you apply. Before you borrow, be sure to understand the drawbacks.
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Not sure which type of personal loan to choose? There are plenty to choose from, and some you should avoid.
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You are here
Use this calculator to find a payment that suits your budget.
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Check out our personal loan reviews to decide which lender is best for you. Each review includes information on loan amounts, term lengths and APRs, as well as a breakdown of the lender's pros and cons, customer service and qualification requirements.
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Ready to get a personal loan? Follow these steps to understand what to expect from the personal loan lenders you're likely to work with.
Other Bankrate calculators
Not looking for a personal loan? These calculators can help you estimate your payment on a variety of loan types:
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Student loan calculator
It's no secret that college is expensive. Use this calculator to understand how much your repayment will cost each month.
Mortgage calculator
Does your dream home have a nightmare monthly payment? Crunch the numbers to determine whether your future mortgage payment is within your budget.
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