Personal Loan Calculator — With Origination Fee & True Cost Breakdown
Calculate your exact monthly payment, cash received, and true total cost with origination fees. Choose fee deducted from proceeds or added to balance. Full amortization schedule included.
Personal Loan Calculator
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Loan Term
12 months
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Balance Over Time
Loan Amount
$20,000
Total Interest
$1,268
Enter an extra payment amount to see your savings.
| Year | Interest | Principal | Balance |
|---|---|---|---|
| 1 | $1,101 | $13,077 | $6,923 |
| 2 | $167 | $6,923 | — |
The Formula
The standard loan amortization formula. P = principal (loan balance), r = monthly interest rate (APRThe total yearly cost of borrowing, including interest and fees, expressed as a percentage of the loan amount. divided by 12), n = number of monthly payments. Origination fees change the effective balance and your true APRThe total yearly cost of borrowing, including interest and fees, expressed as a percentage of the loan amount. in ways that are not always obvious from the stated interest rate.
Variable Definitions
Loan Amount & Duration
The principal (P) is the total borrowed; the term (n) is the duration in months. If an origination fee is added to the balance, P increases accordingly. Together these variables determine your monthly payment and total interest cost.
Monthly Rate
The annual APR divided by 12. For example, a 12% APR equals a 1% monthly rate. This periodic rate is applied to the outstanding balance each month to determine the interest portion of the payment.
Origination Fee Impact
When a fee is deducted from proceeds, you receive less cash but still repay the full loan amount — increasing your effective APR. When added to the balance, you pay interest on the fee for the entire loan term, further increasing the total cost.
How to Use This Calculator
- 1
Enter the loan amount you are requesting from the lender.
- 2
Select the loan term — shorter terms have higher monthly payments but dramatically lower total interest.
- 3
Enter the APR (Annual Percentage Rate) quoted by your lender.
- 4
Select the origination fee type and amount. Most personal loans charge 1-8%.
- 5
Choose how the fee is handled — deducted from proceeds (most common) or added to the balance.
- 6
Review the monthly payment, actual cash received, and total cost of the loan including all fees.
Common Applications
- Compare personal loan offers by calculating the true cost including origination fees, interest, and repayment term.
- See how different origination fee structures — deducted from proceeds versus added to the balance — affect your net loan amount.
- Determine whether a loan with a lower interest rate but higher origination fee is better than a no-fee loan with a higher rate.
Personal loan payments are amortized — early payments cover mostly interest while later payments reduce principal faster
Understanding the Concept
Origination fees are a critical and often overlooked cost of personal loans. A 3% origination fee on a $20,000 loan is $600 — but if it is deducted from proceeds, you only receive $19,400 while repaying the full $20,000 plus interest. This raises your effective APRThe total yearly cost of borrowing, including interest and fees, expressed as a percentage of the loan amount. well above the stated rate. When the fee is added to the loan balance, you pay interest on the fee for the entire loan term, further increasing the total cost. Always compare loans on total cost rather than just the monthly payment or stated APRThe total yearly cost of borrowing, including interest and fees, expressed as a percentage of the loan amount.. The amortization schedule below shows every payment split between interest and principal reduction.
Frequently Asked Questions
Sources & References
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