Personal Loan Calculator

A personal loan calculator should show the fee, not just the rate. Borrow $10,000 at 12% for 3 years and the payment is $332.14 a month. If a 5% origination fee is taken out first, you receive only $9,500.00 but still repay $11,957.18, so the true cost, the APR, is 15.61%, not 12%.

How to use the personal loan calculator

1. Pick a tab: Payment and APR for one loan, Compare offers for two or three quotes side by side, or How much to borrow to start from a monthly payment you can afford.
2. Type the loan amount, the interest rate and the term. Commas and dollar signs are fine.
3. Enter the origination fee as a percent or a dollar amount, and choose whether the lender deducts it from the money you receive or adds it to your balance.
4. Read the payment and APR at the top of the green box. Open Show steps to see how the APR was found, check Compare terms for shorter and longer terms, and open the Payoff schedule for every payment.

Personal loan payment formula

Personal loans are fixed-rate installment loans: the same payment every month until the balance reaches zero. The payment is

M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

• M is the monthly payment.
• P is the balance you repay: the loan amount, plus the fee if the lender adds it to the balance.
• r is the monthly interest rate, the yearly rate ÷ 12. 12% becomes 0.12 ÷ 12 = 0.01.
• n is the number of monthly payments. 3 years is 36.

For $10,000 at 12% over 36 months, (1.01)³⁶ ≈ 1.430769, so M = 10,000 × 0.01 × 1.430769 ÷ 0.430769 ≈ $332.14. The payment is rounded up to the cent, so the last payment is adjusted to $332.28 and total interest comes to $1,957.18. For the full method and more loan types, see the loan calculator.

Origination fees: deducted or added to the balance

An origination fee is a one-time charge for making the loan, usually quoted as a percent of the amount you borrow. Lenders handle it in one of two ways, and it changes what you get and what you owe.

• Deducted from the loan. The fee comes out before the money reaches you. On a $10,000 loan with a 5% fee you receive $9,500.00, but you repay $10,000 plus interest: $332.14 a month.
• Added to the balance. You receive the full $10,000, but you owe $10,500.00, so the payment rises to $348.75 and you pay interest on the fee too. Total interest is $2,055.00 instead of $1,957.18.

If you need a set amount in hand and the fee is deducted, borrow more. To receive $10,000 after a 5% fee, divide by 0.95: $10,000 ÷ 0.95 ≈ $10,526.32. The fee on that is $526.32, which leaves exactly $10,000.00.

How to calculate the true APR of a personal loan

The interest rate only prices the balance. The APR also counts the fee. Under the federal Truth in Lending rule, Regulation Z, the fee is a finance charge, and a fee paid at the start (a prepaid finance charge) is subtracted to get the amount financed: the money actually provided to you. The APR is then the rate that links that amount to the payments you make.

Regulation Z’s Appendix J uses the actuarial method with a monthly unit-period. You look for the monthly rate i at which the payments, each discounted for the months you wait for it, add up exactly to the amount financed:

Amount financed = M ÷ (1 + i) + M ÷ (1 + i)² + … + M ÷ (1 + i)ⁿ, and APR = 12 × i

There is no shortcut formula for i, so you try values until both sides match. The calculator uses Newton’s method and shows each try.

Worked example: APR with a 5% origination fee

1. Loan: $10,000 at 12% for 36 months, 5% fee deducted. Fee = 0.05 × 10,000 = $500.00, so the amount financed is $9,500.00.
2. Payment from the formula: $332.14 (the last one is $332.28).
3. Try i = 1% a month, the interest rate. At that rate the 36 payments are worth $10,000.00, the full loan, which is more than $9,500, so the true rate is higher.
4. Raise i until the payments are worth $9,500.00. That happens at i ≈ 1.30043% a month.
5. APR = 12 × 1.30043% ≈ 15.61%. The fee adds 3.61 percentage points to the 12% rate.

If the same fee is added to the balance instead, you receive $10,000 and repay $10,500 plus interest. The APR works out to 15.43%. It is a little lower because the $500 fee is 5% of the cash you receive, while a deducted fee is $500 out of $9,500, about 5.26%.

How the fee changes the APR (quick-reference table)

APR for $10,000 at a 12% interest rate with the fee deducted. Each figure comes from an exact-cent schedule.

The same fee hurts more on a short loan, because it is spread over fewer months. That is why the APR, not the interest rate, is the number to compare.

Comparing personal loan offers

Suppose three lenders quote you $10,000:

• Offer A: 9.99% for 36 months with an 8% fee deducted. Payment $322.62, APR 15.82%, cost of borrowing $2,414.56.
• Offer B: 13.49% for 36 months with no fee. Payment $339.30, APR 13.49%, cost of borrowing $2,215.02.
• Offer C: 11.49% for 60 months with a 3% fee deducted. Payment $219.88, APR 12.83%, cost of borrowing $3,492.47.

Offer A has the lowest interest rate but the highest APR of the three-year loans, because the fee is large. Offer C has the lowest APR and payment, yet costs the most in dollars, because you pay interest for five years. Offer B is the cheapest in total. Compare the APR for loans with the same term, the cost of borrowing (interest plus fee) in dollars, and whether the payment fits your budget.

How much can you borrow for a monthly payment?

Solve the payment formula for the balance: P = M × (1 − (1 + r)⁻ⁿ) ÷ r. With $300 a month at 12% for 36 months, (1.01)⁻³⁶ ≈ 0.698925, so P = 300 × 0.301075 ÷ 0.01 ≈ $9,032.25. With a 5% fee deducted, the fee is $451.61 and you receive $8,580.64. The APR is again 15.61%.

Common mistakes with personal loan math

• Comparing interest rates instead of APRs. A low rate with a big fee can cost more than a higher rate with none.
• Forgetting the fee reduces your cash. If you need $10,000 to pay off a bill and the fee is deducted, borrowing $10,000 leaves you short.
• Judging by the monthly payment alone. A longer term lowers the payment but raises the total interest.
• Using the yearly rate in the formula. r must be the monthly rate: divide by 12.

Results are estimates for planning, not financial advice. Your lender’s Truth in Lending disclosure shows the official APR; Regulation Z treats a disclosed APR as accurate within 1/8 of a percentage point of the exact figure in most cases.

Sources

Checked November 2026.

• CFPB, Regulation Z, Appendix J: Annual Percentage Rate Computations for Closed-End Credit Transactions (actuarial method, unit-period, APR = unit-period rate × unit-periods per year)
• CFPB, Regulation Z, § 1026.22: Determination of annual percentage rate (actuarial method; the 1/8 percentage point tolerance)
• CFPB, Regulation Z, § 1026.18(b): Amount financed (subtract any prepaid finance charge)
• CFPB, Regulation Z, § 1026.4: Finance charge (loan fees are finance charges)
• CFPB, What is the difference between a loan interest rate and the APR?

Personal loan practice quiz: 10 questions

Test yourself with 10 multiple-choice questions. Choose an answer and press Submit to see if you are right and why. Your score appears at the end.

Frequently asked questions

How is a personal loan payment calculated?

Use M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where r is the yearly rate ÷ 12 and n is the number of months. $10,000 at 12% for 36 months gives $332.14 a month.

Does an origination fee change my monthly payment?

Only if it is added to the balance. A deducted fee leaves the payment the same but gives you less cash. An added fee raises the balance, so the payment rises: $348.75 instead of $332.14 in the example above.

Why is my APR higher than my interest rate?

The CFPB explains that the APR is the interest rate plus additional fees charged with the loan. With an origination fee you pay interest on a balance larger than the cash you received, so the yearly cost is higher than the rate.

Is a lower APR always the cheaper loan?

For loans with the same term, yes. Across different terms, no: a five-year loan can have a lower APR than a three-year loan and still cost more in total dollars, because interest runs for longer.

How much do I need to borrow to get a certain amount after the fee?

Divide the amount you need by (1 − fee rate). To receive $10,000 after a 5% fee, borrow $10,000 ÷ 0.95 ≈ $10,526.32.

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