Personal Loan Calculator

Personal loan total cost uses standard loan amortization to calculate the fixed monthly payment, total amount repaid over the loan term, and the total interest paid — the true cost of borrowing.

Monthly payment formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]

Where:

• M = monthly payment
• P = loan principal (the amount borrowed)
• r = monthly interest rate = APR ÷ 12
• n = loan term in months

Total cost of loan: Total Paid = M × n

Total interest paid: Total Interest = Total Paid − P

Effective APR (including origination fees): True APR = Solve for r where: P − Origination Fee = Σ [M ÷ (1+r)^t] for t = 1 to n

Many lenders charge a 1–8% origination fee deducted from disbursement, which increases the true annual cost of the loan significantly.

What each variable means:

• APR — Annual Percentage Rate; the nominal rate used to calculate interest. The “true APR” including fees is often 1–2% higher than the advertised rate.
• Loan term — personal loans: typically 24–84 months. Shorter term = higher payment but far less interest. Longer term = lower payment but much more interest.
• Origination fee — a one-time fee deducted from disbursement or added to the balance at closing. A $500 fee on a $10,000 loan is effectively an extra 5% charged upfront.

Reference: monthly payment per $10,000 borrowed

• 12 months at 10%: $879/month | Interest: $549
• 24 months at 10%: $461/month | Interest: $1,069
• 36 months at 10%: $323/month | Interest: $1,616
• 60 months at 15%: $238/month | Interest: $4,274
• 84 months at 20%: $217/month | Interest: $8,235

Worked example: Personal loan: $15,000 at 12% APR for 48 months. Origination fee: 3% ($450).

r = 12% ÷ 12 = 1% = 0.01 M = 15,000 × [0.01 × (1.01)^48] ÷ [(1.01)^48 − 1] = 15,000 × [0.01 × 1.6122] ÷ [0.6122] = 15,000 × 0.02634 = $395.10/month

Total paid = $395.10 × 48 = $18,964.80 Total interest = $18,964.80 − $15,000 = $3,964.80 Net disbursement (after fee) = $15,000 − $450 = $14,550 — but you pay interest on the full $15,000.