Monthly personal loan repayments are calculated based on the loan repayment period and the Annual Percentage Rate (APR). Lenders determine the APR rate based on different factors such as creditworthiness, principal amount, and the preferred repayment period. If you secure an $80k personal loan at an APR of 36% and repay it within a year, you are expected to pay $8,037 each month. Repaying the same loan amount for 7 years at an APR of 4%, the monthly payment will drop to $1,094.
If you have a bad credit score, your APR could be higher than applicants with excellent credit history. Shorter loan repayment terms usually have large monthly repayments but low-interest rates. Conversely, you pay higher interest rates but low monthly repayments when you go for personal loans with longer repayment terms.
Here is an example of an $80,000 personal loans monthly payment calculation with an APR of 15%.
| Repayment Period | APR | Monthly Payment | Total Interest |
| 12 months | 15% | $7,221 | $6,648 |
| 24 months | 15% | $3,879 | $13,094 |
| 36 months | 15% | $2,773 | $19,836 |
| 48 months | 15% | $2,226 | $26,870 |
| 60 months | 15% | $1,903 | $34,192 |
| 72 months | 15% | $1,692 | $41,795 |
| 84 months | 15% | $1,544 | $49,674 |
From the table above, monthly repayments for $80k personal loans depend on the loan repayment duration. If you choose to pay off the loan within two years, the monthly payment will be $3,879. However, when you go for the maximum repayment term of 7 years, you will be paying $1,544 each month. Interestingly, you will pay the minimum interest rates if you clear your loan within a year.
Visit your potential lender's website, check out the possible APR range, and calculate the monthly repayments and interest rates. However, choose personal loans with repayment terms that suit your monthly income to avoid getting into a debt cycle.
Conclusion
Planning before taking out a loan is essential in managing your financial life. Get the loan repayment estimates to know how much you will be required to pay for an $80k personal loan monthly and align that to your income. If you can't manage to repay the personal loan within a year, you're free to choose the $80k loan with a cheaper monthly repayment option.