Rate, APR, and the true cost of a loan
The advertised interest rate only tells part of the story. Fees change what a loan actually costs, and the total interest you’ll pay depends as much on the term as on the rate. This calculator shows all of it — the payment, the lifetime interest, the fee-inclusive APR, and how the balance burns down over time.
The payment formula
M = P · r(1 + r)n ÷ ((1 + r)n − 1)
where P = loan amount, r = monthly rate (APR ÷ 12), and n = number of monthly payments. The APR shown above is solved so the present value of all payments equals the cash you actually receive after fees.
What makes this calculator different
- True, fee-inclusive APR. Most calculators ignore origination fees. We fold them in and solve for the effective APR — the only fair way to compare two offers.
- The full cost, visualized. A breakdown of principal vs. interest vs. fees shows exactly where your money goes.
- Extra-payment impact. See how much faster you’d be debt free, and how much interest you’d save, by paying a little extra.
- Months or years, any loan. Works for auto, personal, and student loans, with a full exportable amortization schedule.
Frequently asked questions
What’s the difference between interest rate and APR?+
The interest rate is the cost of borrowing the principal. The APR (annual percentage rate) also folds in mandatory up-front fees — like origination — so it reflects the true yearly cost of the loan. Two loans can advertise the same interest rate but have very different APRs once fees are counted. APR is the apples-to-apples number to compare offers on, which is why this calculator computes it for you.
How is my monthly payment calculated?+
It uses the standard amortization formula M = P · r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments. Each payment covers that month’s interest first, and the rest reduces your balance — so early payments are mostly interest and later ones are mostly principal.
How do origination fees affect the cost?+
Origination and other up-front fees are usually deducted from the money you receive (or added to what you owe), so you pay interest as if you borrowed the full amount while pocketing less. That gap pushes your effective APR above the headline rate. Enter the fee percentage to see the real APR and total cost.
Should I make extra payments on my loan?+
If your loan has no prepayment penalty, extra payments go straight to principal and remove all the future interest that principal would have accrued. Even a modest extra amount each month can shorten the term and save a meaningful chunk of interest — enter an amount to see your specific savings.
Does this work for auto, personal, and student loans?+
Yes. Any fixed-rate, fully-amortizing instalment loan works the same way mathematically. Set the amount, rate, and term (in months or years) to model a car loan, personal loan, student loan, or similar.
Disclaimer: This calculator is for educational purposes only. Actual rates, fees, and terms vary by lender and credit profile, and APR conventions differ slightly by product and jurisdiction. It is not financial or lending advice.