Personal Loan Calculator
Calculate your personal loan's monthly payment, total interest, and total cost — including the effective APR once an origination fee is factored in. Compare a fee deducted from your proceeds against a fee financed into the loan.
Monthly Payment
$387.68Total Interest
$3,609Total Cost
$3,609Interest + origination fee
Effective APR
11.00%Equals the note rate — no fee entered
| Detail | Value |
|---|---|
| Loan Amount Requested | $15,000 |
| Amount Amortized (Principal) | $15,000 |
| Net Proceeds (cash you receive) | $15,000 |
| Scheduled Monthly Payment | $387.68 |
| Total Interest | $3,609 |
| Total Repaid (principal + interest) | $18,609 |
| Total Cost (interest + fee) | $3,609 |
| Nominal APR | 11.00% |
| Effective APR (including the fee) | 11.00% |
| Year | Interest | Principal | Balance |
|---|---|---|---|
| 1 | $1,494 | $3,158 | $11,842 |
| 2 | $1,128 | $3,524 | $8,318 |
| 3 | $721 | $3,932 | $4,386 |
| 4 | $266 | $4,386 | $0 |
Effective APR is solved numerically so the present value of your scheduled payments, discounted at the effective monthly rate, equals your net proceeds — see the formula above. Actual lender terms, fees, and rounding conventions may vary; treat this as an estimate.
Edit inputs ↑Why the effective APR beats the note rate for comparing offers
The interest rate a lender advertises only tells part of the story once an origination fee enters the picture. A 10.00% note rate on a $10,000 loan over 36 months produces a $322.67/month payment with no fee at all — and in that case the effective APR equals the note rate exactly, 10.00%, because every dollar borrowed is also a dollar received.
Add a 5% ($500) origination fee and the two numbers separate. Deducted from proceeds, you still owe the full $10,000 and pay $322.67/month, but the lender only wires you $9,500 — so the 10.00% rate you're quoted actually costs 13.56% once you measure it against what you really received. Financed instead, your balance grows to $10,500, your payment rises to $338.81/month, but you keep the full $10,000 in hand — landing at 13.39% effective APR, lower than the deducted structure because you're not paying interest on cash you never held.
Neither structure changes the total finance charge by much (interest + fee) — deducted totals $2,116 versus $2,197 financed, the difference being the extra interest the financed fee itself accrues. What changes is how much cash lands in your account today versus how it's repaid — which is exactly what effective APR is designed to make comparable.
Reading a personal loan offer
- Note rate. The rate the interest calculation actually uses — this is what compounds against your balance every month.
- Origination fee. A one-time charge, usually quoted as a percentage of the loan amount. Ask the lender explicitly whether it's deducted from your disbursement or added to your balance — offer letters don't always say this plainly.
- Effective APR / disclosed APR. Federal Truth in Lending Act rules require lenders to disclose an APR that folds in certain fees, so the disclosed APR on your offer letter should already be close to the effective APR this calculator computes — use this tool to sanity-check that disclosure or to compare offers that quote fees differently.
- Prepayment penalty. Most modern personal loans don't have one, but confirm — paying off early only saves the interest you'd have otherwise paid if there's no penalty.
Frequently asked questions
How is an origination fee different from the interest rate?
An origination fee is a one-time charge (usually 1-8% of the loan amount) that a lender takes for processing and funding the loan. The interest rate is the ongoing cost of borrowing charged on the outstanding balance every period. Because the fee is paid once but the interest rate is quoted as an annual figure, folding the fee's cost into an equivalent annual rate — the "effective APR" — is the only apples-to-apples way to compare two loans with different fee structures.
What's the difference between a fee 'deducted from proceeds' and a fee that's 'financed'?
Deducted from proceeds: you're on the hook for the full loan amount and it's amortized in full, but the lender subtracts the fee before wiring you the cash — so you receive less than you borrowed. Financed: the fee is added to your loan balance so you receive the full amount you wanted in hand, but you pay interest on the fee itself for the life of the loan. On a $10,000 loan at 10.00% APR over 36 months with a 5% fee, deducted-from-proceeds works out to an effective APR of 13.56%, versus 13.39% financed — deducted is the costlier structure because you pay full interest on money you never actually received.
How do you calculate the effective APR on a personal loan with a fee?
Solve for the monthly rate i that makes the present value of your scheduled payments equal your net proceeds: netProceeds = M × [1 − (1+i)⁻ⁿ] ÷ i, where M is your monthly payment and n is the number of payments. There's no closed-form solution, so it's solved numerically (this calculator uses bisection). Multiply the resulting monthly rate by 12 to annualize it. With no fee at all, net proceeds equal the amortized principal exactly and the effective APR always equals the note rate — for example 10.00% on a 10.00% note rate with zero fee.
Is a lower interest rate always the better deal once fees are included?
Not necessarily. A loan advertising a slightly lower note rate but a larger origination fee can have a higher effective APR than a loan with a higher rate and no fee, especially over a short term (the fee is amortized over fewer payments, so it weighs more heavily per month). Always compare effective APR, not the advertised rate, when the fee structures differ.
Sources
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