Personal loan calculator

A personal loan is typically used to meet general financial needs. The lender provides the full amount upfront, and the borrower repays it through regular instalments.

This calculator helps you estimate the amount of each instalment, based on the loan amount, interest rate, and repayment term. As a general rule, to avoid financial strain, it's advisable that your instalment does not exceed one-third of your net income.

Each instalment is made up of two parts:

• principal, the portion of the amount borrowed you are paying back.
• interest, the cost of borrowing, calculated on the outstanding balance of the loan.

Interest is usually the main cost of a loan. However, there may be additional charges not included in this calculator. The additional charges may include notary fees, taxes, processing fees, instalment collection fees, and insurance premiums.

Before applying for a loan, it's important to consider the APR (Annual Percentage Rate). The APR represents the real cost of the loan, including most fees and charges. The APR must be clearly communicated to you by the lender before you sign any loan agreement.

There are different ways loans can be structured. This calculator uses the 'French' repayment method, which is the most common in Italy. With this method, each instalment is fixed, but the interest portion decreases over time while the capital portion increases.

In our simulations, both the interest rate and instalment amount remain fixed throughout the loan term. If you're considering a variable-rate loan, you can use this tool to simulate how changes in the interest rate might affect your repayments. To do this, enter your remaining loan balance as the loan amount and the remaining loan term as the duration.

For simplicity, we haven't set limits on the interest rate you can enter. Please visit Banca d'Italia's website to check the thresholds beyond which interest rates are considered unlawful.