Personal Loan Calculator
Personal loans often advertise one number — the interest rate — while hiding the one that matters, the annual percentage rate (APR), which also counts fees. An origination fee is usually deducted from the loan before you receive it, so you borrow the full amount and pay interest on it, but you only get the net sum. This calculator shows the monthly payment and total interest, then works out the true APR: the rate at which your payments exactly repay the cash you actually received. It is the fastest way to compare a low-rate, high-fee loan with a higher-rate, no-fee one.
How to use the personal loan calculator
- Enter the loan amount, interest rate and term.
- Enter the origination fee as a percentage; use 0 if there is none.
- Read the monthly payment, the cash you actually receive and the APR.
- Compare APRs, not headline rates, across lenders — and check the total cost of borrowing, not just the payment.
Formula
Payment = L × i ÷ (1 − (1 + i)−n) on the full loan amount L. Cash received = L × (1 − fee%). The APR is found by solving for the monthly rate r at which payment × [1 − (1 + r)−n] ÷ r = cash received, then multiplying by 12. With no fee, APR equals the interest rate.
Worked examples
A loan with a 5% fee
A $15,000 loan at 11% over 48 months with a 5% origination fee has a payment of $387.68 and you receive $14,250.00 after the $750.00 fee. The true APR is 13.76%, noticeably higher than the 11% headline rate.
Fee versus no fee
The same loan at 12.5% with no fee has an APR of 12.5% — so the lower-rate loan with the 5% fee (13.76%) is actually the more expensive of the two over 48 months.
How term changes cost
Stretching the original loan to 84 months drops the payment to $256.84 but total interest rises to $6,574.27, from $3,608.78 over 48 months.
Comparing offers properly
Same loan, different fees
| Offer | Fee | APR |
|---|---|---|
| Lender A: 9.5%, no fee | 0% | 9.5% |
| Lender B: 8%, 4% fee | 4% | 10.14% |
| Lender C: 7%, 8% fee | 8% | 11.38% |
Over a 48-month term on $15,000, the lender with the lowest headline rate is not necessarily the cheapest once the fee is counted — APR puts the offers on a level footing.
Before you borrow
- Check whether prequalifying uses a soft credit check.
- Ask whether there is a prepayment penalty.
- Compare the total cost of borrowing, not only the monthly payment.
Practice problems
Try these yourself first, then check your answer. The answers come from the calculator above.
- A $10,000 loan at 9.9% for 36 months with a 4% origination fee. What is the APR?
Show answer
Monthly payment: $322.20 · APR (including the fee): 12.73%
Common mistakes to avoid
- Comparing headline interest rates and ignoring fees. APR is the like-for-like measure.
- Borrowing the “net” amount you need without allowing for the fee, then finding you received less than expected.
- Choosing the longest term for the lowest payment, which maximises interest.
- Using a personal loan to repay credit-card debt without changing spending habits, then running the cards up again.
- Skipping prequalification. Many lenders show a rate with a soft credit check that does not affect your score.
Frequently asked questions
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR also includes fees such as the origination fee, expressed as an annual rate, so it reflects the full cost.
What is an origination fee?
A one-time charge, typically a percentage of the loan, that many lenders deduct from the amount you receive. A 5% fee on $15,000 means you get $14,250 but repay on $15,000.
How is the monthly payment calculated?
With the amortisation formula on the full loan amount, interest rate and term. The fee does not change the payment but does reduce the money you receive.
What is a good APR for a personal loan?
It varies with credit, lender and market. Compare several quotes — differences of a few percentage points are worth thousands of dollars over the term.
Should I choose a shorter term?
A shorter term has a higher payment but much less total interest. Choose the shortest term you can comfortably afford.
Is this financial advice?
No. It is an educational estimate; rely on your lender’s official disclosure for exact figures.
By Thomas M, Registered Investment Adviser (South Carolina), who launched his own financial advisory firm in 2010. Last reviewed September 26, 2026. Found a mistake? Tell us; see our editorial policy.