Personal Loan Calculator
This personal loan calculator estimates the fixed monthly payment on an unsecured installment loan and, crucially, folds an origination fee into a true APR so you can compare offers on an apples-to-apples basis. You set the amount borrowed, the quoted interest rate, the term in years, and the lender origination fee, and it returns the payment, the total interest, the all-in cost, and the effective APR. Because personal-loan lenders often charge upfront fees, the APR it reports is usually higher than the headline rate.
Formula
M = P · r(1 + r)^n / ((1 + r)^n − 1), with APR solving PV(payments) = P − fee
- P
- Loan amount borrowed
- r
- Monthly interest rate = annual rate ÷ 12 ÷ 100
- n
- Number of monthly payments = years × 12
- fee
- Origination fee = P × (fee percent ÷ 100), deducted up front
How it works
- Enter the Loan Amount and use the Interest Rate slider (0%-30% in 0.125% steps) and the Loan Term slider (1-10 years).
- Enter the Origination Fee as a percentage; the tool computes the fee dollars as loan amount times that percent.
- The standard amortization formula gives the Monthly Payment, then Total Interest and Total Cost follow from payment times the number of months. When a fee is present, the APR is solved so that the present value of the payments equals the amount you actually receive (loan minus fee).
Worked example
A $20,000 loan at a 10% nominal rate over 5 years with a 2% origination fee.
- Monthly rate r = 10 ÷ 12 ÷ 100 = 0.008333; n = 5 × 12 = 60.
- M = 20,000 × 0.008333 × 1.008333^60 ÷ (1.008333^60 − 1) = $424.94.
- Total cost = 424.94 × 60 = $25,496.45; total interest = 25,496.45 − 20,000 = $5,496.45.
- Fee = 20,000 × 2% = $400, so you net $19,600; solving for the rate that makes those payments worth $19,600 gives APR ≈ 10.88%.
Payment $424.94/mo, total interest $5,496.45, total cost $25,496.45, and an effective APR of about 10.88%.
Frequently asked questions
- Why is the APR higher than the interest rate I entered?
- The origination fee is deducted from your proceeds but you still repay the full loan amount, so your real cost of borrowing exceeds the nominal rate. The APR captures that fee, which is why a 10% loan with a 2% fee carries a roughly 10.88% APR here.
- What is an origination fee?
- It is an upfront charge, typically 1%-8% of the loan, that the lender either deducts from the funds you receive or adds to your balance. Personal loans commonly carry one, and it materially raises the effective cost shown as APR.
- How is a personal loan different from a credit card?
- A personal loan is an installment loan with a fixed rate, fixed payment, and a set payoff date, whereas a credit card is revolving credit with a variable rate and a minimum payment. The fixed schedule makes a personal loan easier to budget and faster to clear.
- Does the calculator assume the fee is rolled into the loan?
- No. It treats the fee as deducted from your proceeds, so principal you repay equals the loan amount you entered while the fee only affects the APR. If your lender instead adds the fee to the balance, enter the higher amount as the loan.