Comparing loans by payment alone hides the true cost. Fees taken from the loan (origination fees, points) mean you receive less than you borrow, which raises the effective APR.
How to use the Loan Calculator
- Loan amount
- Interest rate
- Compounding frequency
- Loan term
- Payment frequency
- Prepaid fees (deducted from the loan)
- Fees added to the loan
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the loan amount, interest rate, compounding, term, payment frequency and any fees.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Loan amount | Amount in your currency |
| Interest rate | In % |
| Compounding frequency | Choose one: Yearly, Semi-annually, Quarterly, Monthly … |
| Loan term | Units: years, months |
| Payment frequency | Choose one: Monthly, Semi-monthly, Bi-weekly, Weekly … |
| Prepaid fees (deducted from the loan) | Amount in your currency |
| Fees added to the loan | Amount in your currency |
What each result means
- Number of payments = round([Loan term]×[Payment frequency])
- Payment per period = pmt([Rate per payment], [Number of payments], [Loan amount] + [Fees added to the loan])
- Amount received = [Loan amount] – [Prepaid fees (deducted from the loan)]
- Total interest = [Payment per period]×[Number of payments] – [Loan amount] – [Fees added to the loan]
- Finance charge (interest + fees) = [Payment per period]×[Number of payments] – [Loan amount] + [Prepaid fees (deducted from the loan)]
- Total of payments = [Payment per period]×[Number of payments]
- Real APR (with fees) = rate([Number of payments], 0 – [Payment per period], [Loan amount] – [Prepaid fees (deducted from the loan)])×[Payment frequency]×100
- Effective annual rate = ((1 + rate([Number of payments], 0 – [Payment per period], [Loan amount] – [Prepaid fees (deducted from the loan)]))^[Payment frequency] – 1)×100
Example values
How the main result changes when Loan amount changes and everything else stays at the example values above:
| Loan amount | Payment per period |
|---|---|
| 10,000 | 202.76 |
| 15,000 | 304.15 |
| 20,000 | 405.53 |
| 25,000 | 506.91 |
| 30,000 | 608.29 |
| 40,000 | 811.06 |
Formula
Rate per payment i = (1 + r ÷ m)^(m ÷ p) − 1Payment = (L + financed fees) × i ÷ (1 − (1 + i)^−n)APR = rate at which (L − prepaid fees) equals the present value of the paymentsWorked example
Inputs — Loan amount: $20,000; Interest rate: 8 %; Compounding frequency: Monthly; Loan term: 5 years; Payment frequency: Monthly; Prepaid fees (deducted from the loan): $400; Fees added to the loan: $0.
Results — Number of payments = 60; Payment per period = $405.53; Amount received = $19,600.00; Total interest = $4,331.67; Finance charge (interest + fees) = $4,731.67; Total of payments = $24,331.67; Real APR (with fees) = 8.859 %; Effective annual rate = 9.228 %.
Frequently asked questions
How is a loan payment calculated?
With the annuity formula using the rate per payment period.
What is the finance charge?
All interest and fees you pay for the loan.
Why is the APR higher than the interest rate?
Fees reduce the money you receive, increasing the true cost.
What formula does the Loan Calculator use?
Rate per payment i = (1 + r ÷ m)^(m ÷ p) − 1.