Three figures this model keeps separate
A written loan disclosure can include a stated interest rate, an APR that reflects covered finance charges, and fees that affect the proceeds. This calculator keeps the scheduled payment, modeled interest plus the entered origination fee, and the amount disbursed after that fee separate. It does not calculate the official APR. For the fields above, enter a stated rate before fees and verify the result against the lender’s disclosure.
Consolidating cards? Compare the loan’s total cost against what the cards would cost on your current path — our minimum payment calculator gives that number, and the snowball vs. avalanche tool handles multiple debts.
Method, example, and sources
How this calculator works
The model calculates a fixed monthly installment from the principal, stated annual interest rate, and term. It then adds scheduled interest across all payments. The origination fee is modeled as a percentage deducted from the amount disbursed, so total modeled cost is scheduled interest plus that fee.
Worked example
For the default $15,000 loan at an 11% stated rate over 48 months with a 3% origination fee, the model estimates a $387.68 monthly payment, about $3,609 of interest, and a $450 fee. Net proceeds are $14,550 and modeled interest plus fee totals about $4,059.
What the estimate leaves out
- The displayed cost is not a lender-disclosed Truth in Lending APR and should not replace the loan disclosure when comparing offers.
- Documentation charges, optional insurance, late fees, prepayment terms, taxes, and other account-specific costs are excluded.
- The fee is assumed to be withheld from proceeds while interest is charged on the full principal; a lender may structure charges differently.
Primary sources
Frequently asked questions
What APR should I expect on a personal loan?
There is no reliable universal rate to insert. Lenders can consider credit history, income, existing debts, loan amount, term, collateral, and their own underwriting. Compare actual written offers using the disclosed APR, payment, fees, and total amount financed; this calculator does not predict an approval or market quote.
What is an origination fee?
An origination fee is one possible charge for making a loan. This model assumes it is calculated as a percentage of principal and deducted from the amount disbursed. Check the lender’s disclosure because fees and collection methods vary. Enter the stated interest rate before this fee; if the only rate available is an APR that already reflects fees, this simplified model cannot decompose it reliably.
Is a personal loan good for consolidating credit card debt?
It can reduce scheduled cost only when the new loan’s APR, fees, term, and payment compare favorably with the existing debts. A lower monthly payment can still cost more over a longer term, and consolidation does not erase the old accounts or prevent new balances. Compare written offers and the full repayment paths.
Shorter or longer term?
At the same principal and rate, a longer term generally lowers the scheduled payment and raises total interest; a shorter term does the reverse. The appropriate term depends on the actual offer, budget resilience, fees, and alternatives, so compare scenarios rather than selecting one from a rule of thumb.
Can I pay a personal loan off early?
The contract and applicable law control whether early payoff is allowed and whether a charge or rebate applies. Review the prepayment disclosure before signing and request a payoff quote for an existing loan. This calculator models scheduled payments only and does not estimate an early-payoff amount.