How to use this calculator
- Enter or choose amount you need.
- Enter or choose interest rate (per year).
- Enter or choose loan term.
- Enter or choose origination fee.
- Enter or choose the fee is.
- The monthly payment updates as you type. Use Copy result or Share to keep it.
Method
Payment = P × i × (1 + i)^n ÷ ((1 + i)^n − 1), i = rate ÷ 12. APR = 12 × a, where Σ Payment ÷ (1 + a)^k = money received
- P
- amount borrowed (including the fee if it is added)
- i
- monthly interest rate
- n
- number of months
- a
- monthly cost of credit including the fee
Worked example
- Monthly rate 10% ÷ 12 = 0.8333%; over 36 months, payment on $10,000 = $322.67.
- The 5% fee is $500, so you receive $9,500 but repay 36 × 322.67 ≈ $11,616.19.
- The rate at which those payments are worth $9,500 is about 1.13% a month, or 13.56% APR.
A $10,000 loan at 10% for three years costs $322.67 a month; with a 5% fee deducted, the APR is about 13.56%.
What the result means
If you need the full $10,000 in hand and the fee is deducted, borrow a little more. Comparing offers by APR puts fee-free and fee-charging loans on the same footing.
Assumptions and limits
- Fixed rate and equal monthly payments, with the first payment one month after the loan starts.
- Late fees, payment protection insurance and prepayment penalties are not included.
Questions
Is a deducted fee or an added fee better?
An added fee means you also pay interest on the fee, so your payments are higher; a deducted fee leaves you with less cash. The APR shows the overall cost either way.
How can I lower the cost?
A shorter term cuts total interest, and a better credit score usually brings a lower rate and smaller fee.
Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.