For a smaller loan such as $8,000, the term choice is between a payment that stings and interest that adds up. At 14% APR the 12-month loan costs $718.30 a month and $620 of interest; the 24-month loan costs $384.10 and $1,218.
12 vs 24 months
| APR | 12-month payment | 12-month interest | 24-month payment | 24-month interest |
|---|---|---|---|---|
| 9% | $699.61 | $395 | $365.48 | $771 |
| 14% | $718.30 | $620 | $384.10 | $1,218 |
| 20% | $741.08 | $893 | $407.17 | $1,772 |
When the loan is small, the extra interest from the longer term is often modest in dollars. For emergencies, the larger risk is being unable to make the payment. A lower payment with the option to pay extra gives flexibility.
What we assumed
- Fixed APR and equal monthly payments; no late fees.
- Origination fees are zero unless the post says otherwise.
Related calculators: Personal Loan Calculator, Credit Card Payoff Calculator.
Questions people ask
Should I use a card instead?
Credit cards usually have higher APRs than personal loans, but 0% promotional offers can beat both if you repay within the promotion. Compare the numbers.
Estimates for general education, not financial, tax or legal advice. Real results depend on your lender, employer, tax situation and location. See the disclaimer.