How To Use This Loan Calculator
The calculator updates as you type, so you can try different scenarios in seconds.
- Choose your credit score. Each level fills in an estimated interest rate. If a lender has already quoted you a rate, type it in instead.
- Enter the loan amount. Use the amount you plan to borrow, not the most you could get.
- Pick a term and how often you'll pay. Choose a term from 6 to 120 months, and monthly, bi-weekly or weekly payments.
- Add loan insurance if your offer includes it. Tick "Add loan insurance" and enter the premium from your contract. Many lenders add it to what you borrow, so you pay interest on it too.
- Review your estimate. You'll see your payment, the number of payments, the total interest and the total you'll repay. The tables under the calculator compare terms and show how your balance goes down.
If the payment fits your budget, use the "See if you qualify" button to check your options. It won't affect your credit score.
How Loan Payments Are Calculated
Most personal loans are repaid in equal payments. Each payment covers that period's interest, and the rest pays down the balance. The calculator uses the standard formula:
- Payment = P × r × (1 + r)n ÷ ((1 + r)n - 1), where P is the amount you borrow, r is your annual rate divided by the number of payments per year (12, 26 or 52), and n is the total number of payments.
- Total repaid = payment × number of payments.
- Total interest = total repaid - amount borrowed.
Example: Borrowing $10,000 at 15% for 36 months costs about $346.65 a month, with $2,479.52 in interest, or $12,479.52 in total.
Personal Loan Rates By Credit Score
Your credit score is the biggest factor in the rate you're offered. The calculator's presets are rough estimates for planning, not quotes. Here's what they mean for a $10,000 loan over 36 months:
| Credit level | Typical score range | Estimated rate | Monthly payment | Total interest |
|---|---|---|---|---|
| Excellent | 760 to 900 | 5% | $299.71 | $789.52 |
| Great | 725 to 759 | 10% | $322.67 | $1,616.19 |
| Good | 660 to 724 | 15% | $346.65 | $2,479.52 |
| Average | 560 to 659 | 30% | $424.52 | $5,282.57 |
| Poor | 300 to 559 | 35% (the legal maximum) | $452.36 | $6,284.97 |
Moving from "Average" to "Good" credit cuts the interest on this loan by more than half. Your income, existing debts and the type of lender matter too: banks and credit unions usually charge the least but are the hardest to qualify with, while alternative lenders approve more people at higher rates. Since January 1, 2025, the criminal interest rate in Canada is 35% APR, so no lender can legally charge more, fees included.
How The Loan Term Changes What You Pay
A longer term lowers your payment but increases the total interest. The "Compare loan terms" table under the calculator shows this for your own numbers. For the $10,000 example at 15%:
- 24 months: $484.87 a month, $1,636.80 in interest
- 36 months: $346.65 a month, $2,479.52 in interest
- 60 months: $237.90 a month, $4,273.96 in interest
Pick the shortest term with a payment you can comfortably afford. If you can only afford the payment on a long term, consider borrowing less.
How Much Can You Afford To Borrow?
Start from the payment, not the loan amount. Decide what you can comfortably pay each month after your essentials and other debts, then change the amount in the calculator until the payment fits. For example, $200 a month at 20% covers roughly:
| Term | Loan amount |
|---|---|
| 1 year | $2,159 |
| 2 years | $3,930 |
| 3 years | $5,382 |
| 4 years | $6,572 |
| 5 years | $7,549 |
Lenders also look at your debt-to-income ratio, which compares all your monthly debt payments to your gross income. Leave room in your budget for surprises: a payment that only works if nothing goes wrong is too high.
Borrow Up To $50,000
How To Compare Loan Offers
When you get more than one offer, run each through the calculator and compare the total you'll repay, not just the rate or the payment. A lower rate over a longer term can cost more. For a $10,000 loan:
| 15% over 7 years | 30% over 3 years | |
|---|---|---|
| Monthly payment | $192.97 | $424.52 |
| Total interest | $6,209.27 | $5,282.57 |
| Total repaid | $16,209.27 | $15,282.57 |
The 30% offer costs about $927 less in total despite double the rate, because you pay it off four years sooner. It also needs a payment more than twice as high, so the right choice depends on your budget. Also check:
- The APR. The annual percentage rate includes fees as well as interest, so it's the fairest way to compare offers.
- Fees and add-ons. Anything charged on top of the interest raises your cost without paying down your loan. See the fees to watch for below.
- The lender. No legitimate lender asks for money before you get your loan, or guarantees approval without looking at your finances. Both are signs of a loan scam.
Watch For Fees That Don't Pay Down Your Loan
Some lenders add products and fees to a loan, or bill them along with your payments. They raise what you pay without reducing what you owe, so less of your money goes to the balance. Read your contract for:
- Loan insurance. Also called creditor, balance or payment protection insurance. It's often a one-time premium added to what you borrow, so you pay interest on it for the whole term. Tick "Add loan insurance" in the calculator to see what it costs you.
- Membership or subscription fees. Monthly charges for a "membership", rewards program or account plan billed with your loan.
- Financial education fees. Charges for courses, coaching or budgeting programs bundled with the loan.
- Credit-building fees. A credit builder plan or other product sold alongside the loan, with its own fee.
- Administration, origination or processing fees. Charged up front, taken from the money you receive, or added to the balance.
- Prepayment penalties. Fees for paying the loan off early, which make it harder to save on interest.
Before you sign, ask for the APR, the total cost of borrowing and a written list of everything you're paying for, and make sure the payment you're quoted is the loan payment alone. If a product is optional, you can say no. Loan insurance is optional: federally regulated lenders can't pressure you into buying it and need your express consent, and you can cancel it at any time.
Learn How To Qualify For Other Loan Amounts
Ways To Lower The Cost Of Your Loan
- Improve your credit first. Paying bills on time, keeping card balances under about 30% of your limits and fixing errors on your credit report can move you up a level. More ways to improve your credit score.
- Borrow only what you need. Every dollar you don't borrow is a dollar you don't pay interest on.
- Decline the add-ons you don't need. Insurance, memberships and other extras added to the loan cost interest as well as their own price.
- Choose the shortest term you can afford. See the term comparison above.
- Add a co-signer or security. A co-signer with strong credit, or a secured loan, can get you a lower rate. A co-signer is equally responsible for the loan.
- Pay extra when you can. If your loan allows prepayments without a penalty, extra payments go straight to the balance and cut the interest.
Additional Reading
Loan Calculator FAQs
How do I calculate my monthly loan payment?
Enter the amount, your rate and the term in the calculator above. The formula is P × r × (1 + r)n ÷ ((1 + r)n - 1), where P is the amount, r the annual rate divided by 12 and n the number of months. For example, $10,000 at 15% over 36 months is about $346.65 a month.
What is a good interest rate on a personal loan in Canada?
It depends mostly on your credit score and the lender. Borrowers with excellent credit can get single-digit rates from banks and credit unions, while fair or poor credit usually means rates in the teens to the 30s from alternative lenders. Compare the APR, which includes fees. See the best personal loan rates in Canada.
What is the highest interest rate a lender can charge in Canada?
Since January 1, 2025, the criminal interest rate is 35% APR, including fees. Payday loans follow a separate limit of $14 per $100 borrowed.
Is it better to take a longer or shorter loan term?
A shorter term costs less in interest but has a higher payment. A longer term lowers the payment but costs more overall. Choose the shortest term with a payment you can comfortably afford. The "Compare loan terms" table under the calculator shows the trade-off for your numbers.
Does using a loan calculator affect my credit score?
No. The calculator doesn't ask for personal details or check your credit. Checking your options through "See if you qualify" doesn't affect your score either. A lender may do a hard credit check later, when you formally apply.
What's the difference between the interest rate and the APR?
The interest rate is the cost of borrowing the money. The APR (annual percentage rate) adds the loan's fees, so it shows the full yearly cost. Lenders must disclose the APR, and it's the better number for comparing offers.
Do I have to buy loan insurance?
No, it's usually optional. Federally regulated lenders can't pressure you into buying it, and you can cancel it at any time. If the premium is added to your loan, you also pay interest on it: on a $10,000 loan at 15% over 36 months, a $1,000 premium adds $247.95 in interest and raises the payment to $381.32 a month. Use "Add loan insurance" in the calculator to check your own offer.
Are bi-weekly loan payments better than monthly?
A bi-weekly payment is about half the monthly amount, made 26 times a year. When the loan is set up that way, you pay slightly less interest because the balance goes down sooner: on the $10,000 example, about $33 less. It can also line up with your paycheque.
Can I pay off my loan early?
Usually, yes. Check your loan agreement for a prepayment penalty first. If there is one, compare it with the interest you'd save by paying the loan off early.
Are the results of this calculator exact?
No, they are estimates. Your real payment depends on the rate you're approved for, the lender's fees and how it calculates interest. Use the results to compare scenarios and set a budget, then check the numbers in your loan agreement.
Glossary
| TERM | DEFINITION |
|---|---|
| Accrued Interest | Interest that is earned by an individual, but not yet received. Or, interest that is owed, but not yet paid. Interest is typically earned or payable after a certain period of time, such as a month or a year, which is why it can accrue. |
| Annual Percentage Rate (APR) | The interest rate you pay over a full year in exchange for borrowing. An APR is expressed annually but is typically charged monthly. You can determine the total monthly interest you’ll pay on debt by multiplying the borrowed amount by the APR and then dividing by 12. |
| Assets | Anything that has financial value is considered an asset. In order to reap the benefits of an asset, you must also own it as an individual or business. When it comes to debt, usually only real estate, jewellry, vehicles, and investments are considered assets. |
| Borrower | An individual or entity that takes something (for example money or equipment) with the intention of returning it to the original owner. When the borrower it taking out a loan, there is usually an agreement involved and applicable interest. |
| Cash Advance | A cash withdrawal from a credit card. Cash advances are a very expensive form of financing as the interest rate on the borrowed amount is higher and there is often a flat fee. In addition, interest becomes effective immediately after you withdraw the cash, instead of after the balance due date. |
| Co-Borrower | An individual who shares an obligation of something that was borrowed with one or more people. All co-borrowers listed on an agreement are fully responsible for repaying the obligation. |
| Collateral | Any asset that is used to secure debt. In the event that the borrower defaults on the loan, the lender has the right to seize the asset and sell it to cover the owed amount. Collateral is also commonly referred to as security. |
| Cosigner | An individual who agrees to make your loan payments and otherwise be responsible for your debt in the event that you default on the loan. Using a cosigner is a popular option for individuals who have trouble securing debt on their own. |
| Cost of Borrowing | All of the costs a borrower incurs when borrowing an asset or money. Examples of borrowing costs include legal fees, interest, loan origination fees and penalties. |
| Debtor | An individual or entity that owes a sum of money to a creditor. |
| Delinquency | Failure to pay the minimum payment on a loan or account on or before the agreed-upon payment date. Delinquency is typically categorized in 30, 60, 90 or 120 days since lenders typically have monthly payment cycles. Delinquent accounts may eventually turn into defaulted accounts. |
| Dependent | An individual who relies on another individual for financial support. Usually, this refers to a family member, common-law partner or spouse who is unable to financially support themselves. |
| TERM | DEFINITION |
|---|---|
| Equity | The market value of an asset you own less the amount still owed (including any additional fees to sell or repay debts) on the loan used to purchase the asset if any. Equity increases when you pay down the debt as well as when the value of the asset increases. Equity can be calculated at any point in time and is also referred to as lendable value or net value. |
| TERM | DEFINITION |
|---|---|
| Installments | A payment schedule that breaks up an owed amount of money into several equal amounts, otherwise known as installments, which are paid over an agreed period of time. |
| Loan | An amount of money that is borrowed by one entity from another with the expectation that the amount will be paid back. Interest is typically applied on the owed amount. |
| Loan-to-Value Ratio (LTV) | The ratio of what amount was borrowed to purchase an asset in relation to the market value of that asset. The formula would be: the total amount borrowed for the purchase divided by the total selling price of the asset. The borrowed amount can differ from the selling price if the individual makes a down payment, for example. In general, the lower the LTV, the more favourable the terms of the financing will be. |
| TERM | DEFINITION |
|---|---|
| Payday Loans | A short term, small loan that a borrower promises to repay on their next pay day. Payday loans are known to be an expensive and risky form of financing that makes it challenging for the borrower to repay and manage. |
| Payment Period | The period of time over which a borrower is obligated to make a payment. Payment periods could be weekly, bi-weekly or monthly, sometimes even longer. |
| Prime Rate | The prime rate advertised by a lender is typically based on the Bank of Canada's interest rate that is set each night, which may change at any time. |
| Principal Balance | The total remaining balance of a loan, without considering interest and other fees. |
| TERM | DEFINITION |
|---|---|
| Secured Loan | A loan that is secured by an asset known as collateral or security. In the event that the borrower defaults on the loan, the lender has the right to seize the asset securing the loan and sell it to repay the owed amount. This type of loan bears less risk for the lender, but more risk for the borrower. |
| TERM | DEFINITION |
|---|---|
| Unsecured Loan | A loan that is not secured by an asset known as collateral or security. In the event that the borrower defaults on the loan, the lender will not have the opportunity to seize the collateral or security to repay the owed amount. This type of loan bears more risk for the lender, but less risk for the borrower. |