Calculate personal loan payments including origination fees and the effective APR.
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.
Monthly payment
Payment = Principal × monthly_rate / (1 − (1+r)^−n)
Effective APR
Solve PMT(net proceeds, r, n) = scheduled payment for r; multiply by 12
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.
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.
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.