Personal loan calculator
See the payment and the true cost after an origination fee.
- Formula and assumptions shown
- Table and CSV export
- Runs in your browser
How it works
A personal installment loan is repaid in equal monthly payments over a fixed term. The payment depends on the amount you repay, the interest rate, and the number of months.
Payment = B × r ÷ (1 − (1 + r)^−n), where B is the amount financed, r the annual rate ÷ 12 and n the months (B ÷ n when r = 0). APR = 12 × the monthly rate that makes the cash you receive equal the present value of the payments.
Many lenders charge an origination fee as a percentage of the loan. When it is deducted from the proceeds you receive less cash but repay the full amount; when it is added to the balance you receive the full amount but pay interest on the fee too. Either way the fee raises the APR above the interest rate, which is why the APR is the better number for comparing offers.
Assumptions
- The rate is fixed and payments are equal and monthly, starting one month after funding.
- The origination fee is a percentage of the loan amount, either deducted from the proceeds or added to the balance.
- The APR includes only the entered origination fee. Lenders' disclosed APRs can include other finance charges.
- Late fees, credit insurance, and prepayment penalties are excluded.
Worked example
$10,000 over 36 months at 12% with a 5% fee
The payment is $332.14 a month. Over 36 payments you repay $11,957.15, of which $1,957.15 is interest. With the $500 fee deducted, you receive $9,500, so the estimated APR is 15.61% even though the interest rate is 12%.
Step by step
- Compute the origination fee. 5% × $10,000 = $500. With the fee deducted, the cash received is $9,500 while the amount financed stays at $10,000.
- Compute the payment. The monthly rate is 12% ÷ 12 = 1%: $10,000 × 0.01 ÷ (1 − 1.01^−36) = $332.14 a month for 36 months.
- Split the first payment. Month 1 interest is $10,000 × 1% = $100.00, so $232.14 goes to principal and the balance falls to $9,767.86.
- Total the payments. 36 × $332.14 = $11,957.15 repaid, of which $1,957.15 is interest.
- Solve for the APR. The monthly rate at which 36 payments of $332.14 are worth the $9,500 received is 1.3004%; × 12 = 15.61%. The full cost of the cash received is $11,957.15 − $9,500 = $2,457.15: interest plus the fee.
How to read your result
The headline is the monthly payment, and the line under it compares the estimated APR with the interest rate. The secondary figures show the APR, total interest, the origination fee, the cash you receive, the amount financed, and the total repaid. The donut splits the total repaid into the cash received, interest, and the fee.
Total interest does not include the fee, while total repaid does, whichever way the fee is handled. When the fee is deducted, it is repaid as part of the principal; when it is added, it is financed and also accrues interest. The APR is the single figure that combines rate and fee, which makes it the usual basis for comparing offers of the same term.
The schedule table shows every payment’s interest and principal. It excludes late fees, optional credit insurance, and prepayment penalties, and a lender’s disclosed APR can include finance charges beyond the origination fee.
What changes the result most
- Origination fee
- With no fee, the APR equals the 12% rate. A 1% fee gives 12.70%, 5% gives 15.61%, and 8% gives 17.90%, while the payment stays $332.14 because the fee is deducted from the proceeds.
- Deducted or added
- Adding the $500 fee to the balance means receiving the full $10,000 but financing $10,500: the payment rises to $348.75, interest to $2,055.01, and the APR comes out at 15.43%.
- Term
- Over 24 months the payment is $470.73, interest $1,297.63, and APR 17.23%; over 60 months it is $222.44, $3,346.67, and 14.28%. A longer term spreads the fee and lowers the APR even as it raises interest in dollars.
- Interest rate
- With the same 5% fee, an 8% rate gives $313.36 a month and an 11.52% APR, while 18% gives $361.52 and 21.74%.
Questions
Why is the APR higher than my interest rate?
The APR spreads the origination fee over the loan. When you receive less cash but repay the same payments, the effective yearly cost is higher than the stated rate.
Is it better to have the fee deducted or added to the loan?
Adding it means you get the full amount you need but pay interest on the fee. Deducting it keeps the balance lower but leaves you with less cash, so you may need to borrow more. Compare the APR and total repaid for the amount you actually need.
Does this include other fees?
No. Only the origination fee you enter is included. Check the lender's Truth in Lending disclosure for every fee and the official APR.
Can I use it to consolidate credit card debt?
Yes, as a comparison. Enter the consolidation loan here and your card balance in the credit card payoff calculator, then compare the monthly payment, total interest, and time to pay off.
How does a personal loan work?
A personal installment loan pays out a lump sum, minus any origination fee, which is repaid in equal monthly payments over a fixed term, often two to seven years. Most are unsecured, so the rate is based on credit history and income rather than collateral. Each payment covers that month’s interest first and the rest reduces the balance.
Can I pay off a personal loan early?
Many personal loans allow early repayment without a penalty, but some charge one, so the loan agreement is the place to check. Paying early reduces the interest paid, because interest accrues on the remaining balance. An origination fee is generally not refunded, so an early payoff raises the effective cost of that fee.
More in Loans & debt
Sources
- CFPB: do personal installment loans have fees?
- CFPB: loan interest rate versus APR
- CFPB Regulation Z § 1026.22: determination of annual percentage rate
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.