Personal Loan Calculator
See your monthly payment and the real cost of a personal loan once origination fees are included, so competing offers can be compared fairly.
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The real cost of a personal loan
Personal loans are unsecured, which means no collateral is pledged, and that is reflected in rates that are considerably higher than a mortgage or a car loan. They are commonly used to consolidate credit card balances, cover a home improvement or handle an unexpected expense, and the fixed term means the debt has a definite end, which revolving credit does not.
The advertised interest rate is not the full cost. Most personal loans carry an origination fee, typically 1 to 8 percent of the amount borrowed, deducted from the funds you receive. Borrow 15,000 dollars with a 5 percent origination fee and 750 dollars is taken before the money reaches you, but you repay interest on the full 15,000. The rate charged on the money you actually received is therefore higher than the quoted rate, and that difference is what the effective APR figure on this page shows.
On a 15,000 dollar loan at 11.5 percent over three years with no origination fee, the payment is 494.64 dollars and total interest is 2,807 dollars. Add a 5 percent origination fee and you receive 14,250 dollars while still repaying interest on 15,000. Comparing offers means comparing effective APR, not headline rate, because the fee structure varies so much between lenders.
Personal loans can be a genuinely good tool for consolidating credit card debt, provided two conditions hold. The rate must be meaningfully lower than the cards you are clearing, which is usually the case since cards often run above 20 percent. And you must not run the cleared cards back up. If you consolidate and then spend on the cards again, you have converted unsecured instalment debt into a larger problem rather than solving it.
How the payment and effective APR are calculated
The payment comes from the standard amortisation formula on the full loan amount. The origination fee is then treated as a deduction from what you receive.
| Symbol | Meaning |
|---|---|
A |
Monthly payment |
P |
Loan amount, before any fee is deducted |
i |
Monthly interest rate: annual rate divided by 12 |
n |
Total number of monthly payments |
The effective APR is the rate at which the same stream of payments would have to be discounted to equal the cash you actually received. It is always higher than the quoted rate whenever an origination fee applies, and it is the figure to compare between lenders.
Worked example: 15,000 dollars over three years
A 15,000 dollar personal loan at 11.5 percent over three years, shown with and without a 5 percent origination fee.
| Figure | Result |
|---|---|
| Loan amount | $15,000 |
| Monthly payment | $494.64 |
| Interest paid in month 1 | $143.75 |
| Principal repaid in month 1 | $350.89 |
| Total interest (no fee) | $2,807.04 |
| Total repaid (no fee) | $17,807.04 |
| Origination fee at 5% | $750.00 |
| Amount actually received | $14,250.00 |
| Effective APR with the fee | 15.09% |
With the fee, you receive 14,250 dollars but repay 17,807 dollars over three years. The headline rate is 11.5 percent, yet the true cost of the money you actually received is 15.09 percent, a difference of more than three and a half percentage points. Two lenders quoting the same rate but different fees are not offering the same loan, which is why the effective APR is the figure to compare.
Estimates only. Your lender's figures may differ because of fees, escrow and rounding.
Borrowing well or not at all
Compare effective APR, not the headline rate
A loan at 11 percent with a 6 percent origination fee can cost more than a loan at 13 percent with no fee. Always ask for the total repayment figure and compare that, because it removes the ambiguity created by fee structures.
Check whether you can prequalify without a hard inquiry
Most reputable lenders offer prequalification that shows an estimated rate without affecting your credit score. Use it to shop several lenders, then proceed to a full application only with the best offer.
Do the consolidation maths honestly
Consolidating 12,000 dollars of card debt at 22 percent into a personal loan at 12 percent saves real money. But if you then run the cards up again, you hold both the loan and the new balances. The saving only materialises if the cards stay cleared.
Watch the term against the purpose
Spreading a small loan over seven years reduces the monthly payment but adds a lot of interest and keeps the obligation alive long after the expense is forgotten. Match the term to the life of what you are financing.
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Frequently asked questions
What is an origination fee?
A charge levied by the lender for processing the loan, typically 1 to 8 percent of the amount borrowed. It is usually deducted from the funds you receive, so you borrow more than you get while paying interest on the full amount. It raises the effective cost above the quoted rate.
Is a personal loan better than a credit card?
For a large expense you intend to repay over a fixed period, usually yes, because personal loan rates are commonly well below credit card rates and the term forces a definite payoff. Credit cards remain useful if you clear the balance monthly and pay no interest at all.
What credit score do I need for a personal loan?
Many lenders advertise offers from around 600, but the best rates typically go to borrowers above 700. Below that, expect a higher rate or a larger origination fee. Prequalifying gives you a real number without a hard credit inquiry.
Can I pay off a personal loan early?
Most personal loans have no prepayment penalty, so paying early reduces your interest. A minority do charge one, so check the agreement. Because these loans are short and the rates are relatively high, extra payments have a noticeably larger effect than on a mortgage.
How much can I borrow with a personal loan?
Commonly between 1,000 and 50,000 dollars, though some lenders go to 100,000 for strong applicants. The amount offered depends on income, existing debts and credit history. Borrow only what the purpose requires rather than the maximum available.