What is a personal loan calculator?

A personal loan calculator is a financial tool that estimates the monthly payments for a personal loan, according to Bankrate. The calculator uses the interest rate and loan amount to determine the borrower's most likely monthly payments.

Loan calculators can take the loan term in years or months and the loan start date to calculate monthly payments, according to Bankrate. Personal loan calculators may provide an amortization schedule and offer pie charts that let borrowers compare interest to principal.

Borrowers should be aware that interest rates can change over the life of a loan and that the figures provided by a personal loan calculator are simply estimates, states Capital Bank.