What this calculator does
Find out what a personal loan will cost you each month, and what its setup fee adds. Enter the loan amount, the interest rate, the term and the origination fee. You'll see the monthly payment, the cash you actually receive, the total interest and the true APR.
Many personal loans charge an origination fee, a one-time charge for setting up the loan. Often the lender keeps it from the money it sends you. So a $15,000 loan with a 5% fee puts only $14,250 in your bank account. You still repay all $15,000 with interest. The true APR counts that fee, which makes it the fairest way to compare two offers.
Where it's used
Why this math matters outside the classroom:
- Comparing loan offers. A borrower compares 11.5% with a 5% fee against 13% with no fee by checking which true APR is lower.
- Getting enough cash. Someone who needs $15,000 for a project asks for about $15,789.47, since a 5% fee comes out of the loan.
- Paying off cards. A household checks whether a 3-year personal loan costs less in total than its credit card balances.
- Budget planning. A family checks that a $494.64 monthly payment fits its budget before signing a 3-year loan.
- Finance class. Students solve for the monthly rate that sets 36 payments of $494.64 equal to $14,250 received.
Grade level and standards: Grade 12 to college; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter the loan amount on the offer and the yearly interest rate, without the fee.
- Enter the term in years or months.
- Enter the origination fee as a percent of the loan or in dollars, and choose whether it's taken out of your cash or added to the loan.
- Read the monthly payment, then compare the true APR and total cost of borrowing between offers.
What the inputs mean
- Loan amount
- The amount written on the loan offer, before any fee is taken out. It must be more than zero.
- Interest rate
- The yearly interest rate on what you owe. The calculator divides it by 12, because interest is charged every month. Enter the rate without the fee here; the fee goes in its own box.
- Loan term
- How long you have to pay the loan back. Years become months, rounded to the nearest whole month, from 1 to 600.
- Origination fee
- The one-time setup charge. Pick % to enter it as a share of the loan amount, or dollars for a flat charge. Use 0 if the loan has no fee.
- How the fee is paid
- Most lenders take the fee out of the money they send you. Some add it to your balance instead, so you get the full amount but owe more. Your loan agreement says which one applies.
Formula and method
fee = loan amount × fee % (or the flat dollar fee) fee taken out: owed = loan amount; cash received = loan amount − fee fee added: owed = loan amount + fee; cash received = loan amount i = rate ÷ 100 ÷ 12 payment = owed × i ÷ (1 − (1 + i)^(−n)) total cost of borrowing = payment × n − cash received true APR = 12 × r, where cash received = payment × (1 − (1 + r)^(−n)) ÷ r
In these formulas, i is the monthly interest rate and n is the number of monthly payments. The payment formula is the standard one for a loan paid off in equal monthly amounts. It's the same formula the loan payment calculator uses.
The fee changes things in one of two ways. If it's taken out, your payment stays the same, but you get less cash. If it's added, you get the full cash, but your payment rises. Either way, the loan costs you more than the interest rate suggests.
In the last line, r is the true monthly rate. It makes your payments worth exactly the cash you got, and the true APR is 12 times r. No simple formula gives r directly. So the calculator tries rates, narrowing in until one fits to far less than 0.0001%.
Worked example
You're offered $15,000 at 11.5% interest for 3 years. The lender charges a 5% origination fee and takes it out of the money it sends you.
- Number of payments: 3 × 12 = 36.
- Fee: $15,000 × 5% = $750, so you receive $15,000 − $750 = $14,250.
- Monthly rate: 0.115 ÷ 12 ≈ 0.00958333.
- Payment on the full $15,000: $15,000 × 0.00958333 ÷ (1 − 1.00958333^(−36)) ≈ $494.64.
- Total paid: about $17,807.04, so the interest is $2,807.04.
- Total cost of borrowing: $17,807.04 − $14,250 = $3,557.04, which is the interest plus the fee.
Result: The monthly payment is about $494.64. The true APR is about 15.09%, well above the 11.5% interest rate. To get the full $15,000 in hand, you'd need to borrow about $15,789.47. If the fee were added to the loan instead, the payment would be $519.37 and the true APR about 14.92%.
Understanding the result
Compare offers by true APR and total cost of borrowing, not by the interest rate alone. A loan with a lower rate and a big fee can cost more than one with a higher rate and no fee.
The fee matters more on a short loan. It's spread over fewer months, so it raises the true APR more. A 5% fee on a 1-year loan adds far more to the APR than the same fee on a 5-year loan.
If you need a set amount of cash, check the line that shows how much to ask for. With a fee taken out, borrowing exactly what you need leaves you short.
Assumptions and limitations
- The interest rate stays the same for the whole loan.
- You make the same payment every month, at the end of each month, starting one month after you get the money.
- The interest rate is a yearly rate divided by 12. Interest is charged on what you still owe each month.
- The fee is paid once, at the start. A percent fee is a share of the loan amount entered.
- Payments aren't rounded to the cent, so the small change lenders often make to the last payment isn't shown.
- It doesn't include late fees, insurance you might add, or charges for paying the loan off early.
- Lenders may charge interest daily or round payments differently, so their numbers can differ by a few cents.
- The true APR here follows the usual method for monthly loans. The APR in your official loan papers is the one that counts.
- Results are estimates. They aren't an offer of credit or financial advice.
Frequently asked questions
What's the difference between the interest rate and the true APR?
The interest rate is charged on what you owe. The APR (annual percentage rate) also counts required fees, such as an origination fee. With no fee, the two match. With a fee, the APR is higher, because you pay the same or more for less cash.
Is it better to have the fee taken out or added to the loan?
Taking it out costs a little less overall, because you don't pay interest on the fee. In the example, it costs $3,557.04 against $3,697.40. Adding it gives you the full cash amount, but your payment and total cost go up.
How much should I borrow to get the cash I need?
Divide the cash you need by 1 minus the fee rate. For $15,000 with a 5% fee, that's $15,000 ÷ 0.95, about $15,789.47. The calculator shows this whenever the fee is taken out of your cash.
How is this different from the loan payment calculator?
The loan payment calculator shows the payment and interest on the amount you borrow, with no fees. This one adds the origination fee. It shows the cash you'd really get, the full cost of borrowing and the true APR.
Does a longer term make a personal loan cheaper?
It lowers the monthly payment, but you pay interest for longer, so the total interest rises. A longer term does spread the fee out, which lowers the true APR. Compare the total cost of borrowing to see which term costs less overall.
How this calculator is checked
Method: Standard level-payment amortization formula with monthly rate = rate ÷ 12. True APR is the nominal yearly rate at which the payments' present value equals the cash received (the actuarial method for regular monthly loans), solved by bisection. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-26. Found a problem? Tell us.
Embed this calculator
Put this Personal Loan Calculator on your own website or blog for free. Paste this code where you want it to appear: