How to use this calculator
- Loan amount: the amount you apply for, the number on your loan offer.
- Interest rate and loan term: the note rate and the number of months.
- Origination fee: as a percentage of the loan amount. Enter 0 if there’s no fee.
- The fee is: choose Taken from the loan if the lender deducts it from the money you receive (the most common setup), or Added to the balance if you receive the full amount and the fee is added to what you repay.
The results show the monthly payment, the cash that reaches your bank account, the total interest and the true APR that includes the fee. A table compares your term with the terms either side of it.
How the payment and APR are worked out
The monthly payment uses the standard amortization formula, where P is the balance you repay, r is the interest rate ÷ 12 and n is the number of months:
The APR is the yearly rate that balances the cash you receive today against the payments you make. The calculator solves this equation for the monthly rate i, then multiplies by 12:
There’s no neat formula for i, so it’s found numerically (by narrowing the range until the two sides match to well under a hundredth of a percent). This is the actuarial method described in the federal Truth in Lending rules (Regulation Z). With no fee, the APR equals the interest rate.
Worked example
You borrow $10,000 at 12% for 36 months with a 5% origination fee taken from the loan.
- Fee: 5% × $10,000 = $500, so you receive $9,500
- Monthly payment on $10,000: $332.14
- Total interest over 36 payments: $1,957
- Total cost of borrowing (interest + fee): $2,457
- True APR: 15.61%, about 3.6 percentage points above the 12% rate
If the same fee is added to the balance instead, you receive the full $10,000 but repay $10,500. The payment rises to $348.75, interest to $2,055, and the APR is 15.43%.
How fees and term change the true APR
For a $10,000 loan at 12% with the fee taken from the proceeds:
| Origination fee | 2-year APR | 3-year APR | 5-year APR |
|---|---|---|---|
| 0% | 12.00% | 12.00% | 12.00% |
| 1% | 13.02% | 12.70% | 12.44% |
| 3% | 15.09% | 14.13% | 13.35% |
| 5% | 17.23% | 15.61% | 14.28% |
| 8% | 20.55% | 17.90% | 15.74% |
Two patterns stand out. Each percentage point of fee adds more to the APR on a short loan, because the upfront cost is spread over fewer years. And a fee can make a loan with a lower rate more expensive than one with a higher rate and no fee, which is why APR is the number to compare.
Comparing terms
The same $10,000 at 12% with a 5% fee:
| Term | Monthly payment | Total interest | True APR | Cost of borrowing |
|---|---|---|---|---|
| 2 years | $470.73 | $1,298 | 17.23% | $1,798 |
| 3 years | $332.14 | $1,957 | 15.61% | $2,457 |
| 5 years | $222.44 | $3,347 | 14.28% | $3,847 |
The 5-year loan has the lowest APR but the highest total cost: lower payments, more months of interest. Choose the term by the payment you can comfortably make, then look at the total cost.
Tips for choosing a personal loan
- Compare APRs from several lenders. Many let you check your rate with a soft credit pull, which doesn’t affect your score.
- Borrow what you need after the fee. If you need $10,000 in hand and the fee is 5% and deducted, you’ll need to borrow about $10,527.
- Look past the payment. The total cost of borrowing (interest plus fee) is what the loan actually costs you.
- Check for prepayment penalties. Many personal loans have none, which lets you pay extra and cut interest.
- Have a plan for consolidated debt. If the loan pays off credit cards, our debt payoff calculator and credit card payoff calculator help you compare paying the cards down directly. Lenders also weigh your debt-to-income ratio when they set your rate.
For a loan with no fee, the general loan calculator adds a payoff date and a full amortization schedule.
Assumptions and limitations
The calculator assumes a fixed rate, equal monthly payments starting one month after you receive the money, and interest charged at the rate ÷ 12. The APR includes the origination fee only. Other charges your lender counts as finance charges, such as some insurance products, would raise it further. Lenders round slightly differently, so your disclosed APR can differ by a few hundredths of a percent. Your loan’s Truth in Lending disclosure is the official figure.
Sources
- Consumer Financial Protection Bureau, Regulation Z § 1026.22: Determination of annual percentage rate
This calculator gives estimates for general information. It isn’t financial advice or a loan offer.
Frequently asked questions
What is an origination fee on a personal loan?
It's a one-time charge for processing the loan, usually set as a percentage of the loan amount. Most lenders subtract it from the money they send you, so a $10,000 loan with a 5% fee puts $9,500 in your account while you repay the full $10,000 plus interest. Some lenders charge no fee at all.
How is the true APR calculated with a fee?
The APR is the interest rate that makes the cash you actually receive equal to the present value of all your payments. Because the fee shrinks the cash you receive but not the payments, the APR comes out higher than the loan's interest rate. The calculator finds it numerically, the same actuarial approach used for Truth in Lending disclosures.
How much should I borrow if the fee comes out of the loan?
Divide the cash you need by one minus the fee rate. To end up with $10,000 after a 5% fee, you'd borrow about $10,527, because 5% of that is about $527. Remember that you then repay and pay interest on the larger amount.
Is it better to have the fee deducted or added to the balance?
The costs are close. On a $10,000, 3-year loan at 12% with a 5% fee, a deducted fee gives a 15.61% APR, while adding the fee to the balance gives about 15.43%, with a higher payment because you borrow the fee too. Compare offers using the APR and total cost rather than the fee method.
Why does a shorter loan show a higher APR?
The fee is paid upfront, so on a short loan it's spread over fewer years and adds more to the yearly rate. A 5% fee raises the APR on a 12% loan to about 17.23% over 2 years but only to about 14.28% over 5 years. The longer loan still costs more in total, because you pay interest for longer.
Can a personal loan save money on credit card debt?
It can if the loan's APR is well below your cards' rates and you don't run the cards back up. Compare the loan's total cost of borrowing here with the interest you'd pay on the cards using the credit card payoff calculator. Check your budget too, since the fixed payment may be higher than your card minimums.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.