Loan Calculator
Calculate monthly payments and total cost for any type of loan — personal loans, student loans, business loans, and more.
How Loan Payments Work in 2026
Every loan payment has two parts: principal (reducing what you owe) and interest (the cost of borrowing). In the early years, most of your payment goes to interest. Over time, more goes to principal — this is called amortization.
2026 Loan Rates by Type
- Personal loan (good credit): 7-12%
- Personal loan (fair credit): 13-20%
- Auto loan (new): 5-7%
- Auto loan (used): 7-10%
- Mortgage (30-year fixed): 6.5-7.0%
- Mortgage (15-year fixed): 5.8-6.3%
- Student loan (federal): 5.50-8.05%
- Home equity loan: 7-9%
- HELOC: 7.5-9.5% (variable)
Amortization: Why Early Payments Are Mostly Interest
On a $300,000 mortgage at 6.5% for 30 years ($1,896/month):
- Month 1: $1,625 interest / $271 principal (86% interest!)
- Year 5: $1,500 interest / $396 principal
- Year 15: $1,100 interest / $796 principal
- Year 25: $500 interest / $1,396 principal
Tip: Making just 1 extra payment per year on a 30-year mortgage pays it off 4 years early and saves $40,000+ in interest.
How to Get the Best Loan Rate
- 1. Improve your credit score — Going from 680 to 760 can save 1-2% on most loans
- 2. Shop at least 3 lenders — Rates can vary 1-3% for the same borrower
- 3. Shorter term = lower rate — 15-year mortgage rates are 0.5-1% lower than 30-year
- 4. Put more down — 20% down on a mortgage avoids PMI ($100-300/month)
- 5. Consider credit unions — Often offer 0.5-1.5% lower rates than big banks
Warning Signs of a Bad Loan
- Prepayment penalties — You shouldn't be charged for paying off early
- Variable rate with no cap — Your payment could double if rates rise
- APR much higher than advertised rate — Big gap means hidden costs
- Pushed add-on products — Credit insurance, GAP coverage often overpriced at dealers
Frequently Asked Questions
How does a loan calculator help me?
Our loan calculator helps you estimate monthly payments based on loan amount, interest rate, and term. It also shows total interest paid and the full amortization schedule so you can plan your finances better.
What is a good interest rate for a personal loan?
As of 2026, competitive personal loan rates range from 8% to 15% APR depending on your credit score. Those with excellent credit (740+) may qualify for rates as low as 6-8%, while borrowers with fair credit (640-699) typically see rates of 15-22%.
How is interest calculated on a loan?
Loan interest is calculated monthly based on the remaining principal balance. Early in the loan, more of your payment goes to interest. As you pay down the principal, the interest portion decreases and more goes to principal.
What is an amortization schedule?
An amortization schedule shows how each payment is split between principal and interest over the life of the loan. It also shows your remaining balance after each payment, helping you track how fast you're paying off debt.
Should I choose a shorter loan term?
Shorter loan terms mean higher monthly payments but significantly less total interest paid. For example, a 3-year loan at 10% APR costs much less in total interest than a 6-year loan at the same rate. Choose based on your budget comfort level.
What's the difference between secured and unsecured loans?
Secured loans require collateral (like a car or savings account) and typically offer lower rates. Unsecured loans don't require collateral but have higher rates and stricter credit requirements.