Personal Loan Calculator
Calculate personal loan payments including origination fees and the effective APR.
Inputs
Deducted from disbursement; borrower still repays full stated principal.
Application, processing or administrative fees paid at closing.
Monthly Payment
$332.14
Effective APR
14.13%
True cost of the loan including all upfront fees.
APR above Stated Rate
2.13%
How much fees inflate your true rate.
Total Interest Paid
$1,957.15
Total Amount Paid
$11,957.15
Net Proceeds Received
$9,700.00
Total Upfront Fees
$300.00
Step by step
Stated monthly rate
12% ÷ 12
= 1.0000%
Origination fee
$10,000.00 × 3%
= $300.00
Net proceeds to borrower
$10,000.00 − $300.00
= $9,700.00
Borrower receives this; repays full stated principal.
Monthly payment (on full principal)
PMT($10,000.00, 1.0000%, 36)
= $332.14
Effective APR (rate on net proceeds)
rate($9,700.00, $332.14, 36) × 12
= 14.13%
2.13% above stated rate due to fees.
How it works
Personal loans are unsecured, so lenders offset the higher risk with origination fees — typically 1–8% of the loan amount — that are deducted from disbursement. The borrower receives less than they applied for but repays the full stated principal. This makes the effective APR (the rate that would produce the same payment on the net proceeds) meaningfully higher than the advertised rate. This calculator surfaces that spread so you can compare loan offers on an equal footing.
Formulas
Monthly payment
Payment = Principal × monthly_rate / (1 − (1+r)^−n)
- P
- Full stated principal
- r
- Monthly rate = stated APR/12
- n
- Months
Effective APR
Solve PMT(net proceeds, r, n) = scheduled payment for r; multiply by 12
- F
- Total upfront fees
- P-F
- Net proceeds disbursed
Frequently Asked Questions
Why is my effective APR higher than the stated rate?
The origination fee is effectively prepaid interest. Because it's deducted upfront but amortised over the loan term, it's equivalent to a higher interest rate on a smaller amount. A 3% fee on a 3-year loan adds roughly 1.9–2.1 percentage points to the effective APR.
Should I compare loans by monthly payment or effective APR?
Compare by effective APR: it's the only apples-to-apples metric. A loan with a lower stated rate but a high origination fee can easily cost more than a slightly higher stated rate with no fee, especially on shorter terms.
Can I negotiate the origination fee?
Yes, sometimes. Online lenders and credit unions vary widely. A borrower with strong credit often receives offers with 0–1% origination fees. It's always worth asking, especially on larger loan amounts where the fee dollar amount is significant.