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  3. Loan Calculator

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How to use Credit Karma’s loan calculator

Whether you’re thinking of taking out a personal loan for debt consolidation or a student loan for college costs, you probably want a sense of how much your loan will cost over time. 

Our loan calculator can help you understand the costs of borrowing money and how loan payments may fit into your budget. It takes into account your desired loan amount, repayment term and potential interest rate. You’ll be able to view an estimated monthly payment, as well as the amortization schedule, which provides a breakdown of the principal and interest you may pay each month.

Keep in mind that this loan payment calculator only gives you an estimate, based on the information you provide. Loan fees like prepayment penalty or origination fee could increase your costs or reduce the loan funds you receive. This loan payment calculator also doesn’t account for additional mortgage-related costs, like homeowners insurance or property taxes, that could affect your monthly mortgage payment.

Here are more details on the information you’ll need to estimate your monthly loan payment.

Loan amount

This is the amount that you’d like to borrow. For example, if you want to take out a $5,000 personal loan for home improvements, wedding costs or medical bills, you should enter that amount.

Loan term

Your loan term is the amount of time you have to pay back your loan — you’ll often see the term expressed as a number of months. Terms offered depend on the lender and loan type.

For example, personal loan terms often range from 12 months to 84 months. Meanwhile, federal student loans typically have much longer terms — potentially stretching from 10 years to 30 years. Private student loans generally come with terms of 10 years to 25 years.

Mortgages tend to have 15-, 20- or 30-year terms.

A longer loan term may mean smaller monthly payments — but remember that the trade-off is you’ll likely pay more interest over the life of the loan.

Interest rate

Interest rate is the cost of borrowing, expressed as a percentage. Your interest rate is different from your APR, or annual percentage rate, which includes any loan fees in addition to the interest rate.

Entering your estimated APR into this field in our loan calculator instead of the interest rate will give you a more accurate idea of your potential monthly payment.

What is the average interest rate on a loan?

How much you’ll pay in interest depends on a number of factors, including your credit history and credit scores, the type of loan, your loan term, loan amount and any down payment.

Here’s a look at some average interest rates for different loan types.

Average interest rates for personal loans

Loan term2017201820192020
24 months10.13%10.32%10.32%9.51%
Source: Federal Reserve

Average interest rates for student loans

Undergraduate borrowersGraduate/professional borrowersParent/graduate/professional student
Direct Subsidized Loans and Direct Unsubsidized LoansDirect Unsubsidized LoansDirect PLUS Loans
Source: Studentaid.gov. (Loans disbursed on or after July 1, 2020, and before July 1, 2021.)

What should you consider before taking out a loan?

As you estimate your payments, keep in mind that doing some planning before you apply for a loan can pay off in the long run.

Set a budget

If you need or want to take out a loan, it’s a good idea to figure out how much space you have in your monthly budget. You don’t want to take on a payment that will be a struggle to make each month. Additionally, lenders may look at your debt-to-income ratio to determine whether you qualify for a loan and — if so — how much they may lend you.

Decide if you want to put up collateral

Secured loans often have lower interest rates than unsecured loans, but they come with a risk: You’re putting up collateral such as your car or home in exchange. That means if you default on your loan, the lender could take your property.

Compare loan offers

It’s a good idea to shop around and compare loan offers from multiple lenders. You can check your estimated rate by applying for prequalification, if possible. Getting prequalified gives you an idea of what your loan rate and loan terms could be and without a hard inquiry on your credit reports.

Just remember that if you decide to officially apply for a loan you prequalify for, your rate and terms could still change, and the lender will likely perform a hard credit inquiry, which can negatively affect your credit scores.