Personal Loan Calculator
Calculate personal loan payments including origination fees and the effective APR.
About Personal Loan Calculator
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
Worked example
With the default values below, Personal Loan Calculator returns Monthly Payment of $332.14. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Loan Amountaccepts 100–500,000 $
- 10,000 $
- Stated Annual Interest Rateaccepts 0–100 %
- 12 %
- Loan Termaccepts 6–120 months
- 36 months
- Origination Feeaccepts 0–20 %
- 3 %
- Other Upfront Feesaccepts 0–10,000 $
- 0 $
Results
- Monthly Payment
- $332.14
- Effective APRTrue cost of the loan including all upfront fees.
- 14.13%
- APR above Stated RateHow much fees inflate your true rate.
- 2.13%
- 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
- 1Stated monthly rate= 1.0000%
- 2Origination fee= $300.00
- 3Net proceeds to borrower= $9,700.00Borrower receives this; repays full stated principal.
- 4Monthly payment (on full principal)= $332.14
- 5Effective APR (rate on net proceeds)= 14.13%2.13% above stated rate due to fees.
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Personal Loan Calculator — full guide
The gap between the rate quoted and the rate paid
Personal loans are unsecured, and lenders price that risk partly through an origination fee deducted before the money reaches you. You repay interest on the full stated principal but only ever receive the net proceeds. The advertised rate therefore understates your cost. This calculator makes the gap explicit, so two offers with different fee structures can be compared on the same basis.
Inputs: loan amount, stated annual interest rate, term in months, origination fee as a percentage, and any flat upfront fees.
Two calculations
First the scheduled payment, from the standard amortizing formula on the full principal:
Payment = Principal × r / (1 − (1 + r)^−n), with r = annual rate ÷ 12 and n the term in months.
Then the effective APR. Hold that payment fixed, substitute the net proceeds for the principal, and solve for the monthly rate that makes the equation balance:
PMT(net proceeds, i, n) = scheduled payment, then effective APR = i × 12
There is no closed-form solution for i; it is found numerically.
Worked example on the defaults
$10,000 at a stated 12% over 36 months, 3% origination fee, no other fees.
| Quantity | Value |
|---|---|
| Monthly rate, 12% ÷ 12 | 0.01 |
| Scheduled monthly payment | $332.14 |
| Total of 36 payments | $11,957.15 |
| Total interest on the stated principal | $1,957.15 |
| Origination fee, 3% of $10,000 | $300 |
| Net proceeds received | $9,700 |
| Effective APR | 14.13% |
| APR above stated rate | 2.13 points |
You pay $11,957.15 to borrow $9,700 — a true cost of $2,257.15, not the $1,957.15 the interest line suggests.
How to use the spread
The 2.13-point spread is the number to carry into a comparison. A rival offer at a stated 10.99% with a 6% fee produces a lower payment of $327.34, which looks better — but its effective APR is 15.32%, worse than the 14.13% above. Payment size and headline rate can both mislead; the effective APR cannot.
Fees bite harder on short terms, because the same upfront cost is spread over fewer payments. Push the default fee to 8% and the effective APR jumps to 17.90%.
Limitations
- Assumes the fee is deducted at funding, not added to the balance.
- Assumes no prepayment. Paying off early raises the effective APR further, since the fee is amortized over a shorter life.
- Late fees, insurance add-ons and autopay discounts are not modelled.
- A regulated APR disclosure may include or exclude different charges than this calculation.
Not financial advice — read the loan agreement.
Related: Loan Calculator, Credit Card Payoff Calculator, Debt Payoff Calculator.
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.
What belongs in the Other Upfront Fees field?
Flat-dollar charges taken at funding rather than percentages: documentation fees, a credit-report charge, a wire or disbursement fee. They reduce net proceeds exactly as the origination fee does. Adding a $75 flat fee to the defaults drops proceeds from $9,700 to $9,625 and pushes the effective APR above 14.13%, while the $332.14 payment stays unchanged.
Does the origination fee change my monthly payment?
No, and that is the trap. The payment is computed on the full $10,000 stated principal, so it stays at $332.14 whether the fee is 0% or 8%. The fee only changes what lands in your account — $9,700 at 3%, $9,200 at 8%. Because the payment is identical, the fee is invisible unless you look at the effective APR.
What if my lender adds the fee to the loan instead of deducting it?
Then you are financing a larger principal at the stated rate. Model it by entering the grossed-up amount with the fee set to 0%: to actually receive $10,000 with a 3% fee you must borrow $10,309.28, and the payment rises to $342.42. The total cost is similar either way; only the payment and the balance differ.
Is the effective APR here the same as the APR my lender discloses?
It is the same idea, computed on your inputs. Regulated APR disclosures follow prescribed rules about which charges count — some include credit insurance or exclude certain third-party costs — so a lender's figure may differ by a fraction of a point. Use this one to compare offers consistently; use the disclosure as the legally binding number.