Personal loan calculator
Personal loans quote a rate and then charge an origination fee out of the money they send you. You repay the full amount but receive less, which makes the true cost higher than the rate.
Personal loan calculator
Payment schedule
The fee is the part that catches people
Personal lenders commonly charge an origination fee of 1–8%, and almost all of them deduct it from the disbursement rather than billing it. Borrow $20,000 at a 5% fee and $19,000 arrives. You still repay $20,000 with interest.
That gap is why the APR exceeds the interest rate. On a $20,000 loan at 12.5% over five years with a 5% fee, the quoted rate is 12.5% and the true cost is closer to 14.9%. Neither number is dishonest; they measure different things, and only one reflects what happened to your bank balance.
Borrow the gross, not the net
If you need $20,000 in hand, ask for $21,053 at a 5% fee. Requesting $20,000 and receiving $19,000 is the most common and most avoidable mistake on these loans.
Comparing offers
Compare APR, never the interest rate, and check the fee is included in the APR the lender quotes — in the US it must be. A lender with a higher rate and no fee frequently costs less overall than one advertising a lower rate with 8% taken off the top.
Prepayment
Most personal loans have no prepayment penalty, which makes overpaying straightforward and worth doing at these rates. What you cannot recover is the origination fee — it is spent on day one, so paying the loan off early raises your effective APR rather than lowering it.
Guides that explain this
Written with the same engine, so every figure agrees with the calculator.
APR vs interest rate: what actually separates themWhat separates APR from the interest rate, which fees are included, and why APR quietly flatters a loan you will not keep for its full term.8 min read
Student loan repayment without guessingRepayment plans compared on total cost, when refinancing federal loans is a mistake, and how capitalisation quietly inflates your balance.10 min read
How your credit score sets your interest rateWhat a credit score is built from, how score bands translate into real rate differences and dollars, and which actions move a score quickly versus slowly.10 min read
Questions people actually ask
How does an origination fee affect a personal loan?
It is deducted from the money you receive but not from what you repay. A 5% fee on a $20,000 loan means $19,000 arrives while you still repay $20,000 plus interest, pushing the true APR well above the quoted rate.
Why is my personal loan APR higher than the interest rate?
Because APR includes the origination fee. On a $20,000 loan at 12.5% over five years with a 5% fee, the APR is roughly 14.9%.
Should I borrow more to cover the fee?
Yes, if you need a specific amount in hand. At a 5% fee you need to request about $21,053 to receive $20,000.
Does paying off a personal loan early save the origination fee?
No. The fee is charged up front and is not refundable, so early repayment saves interest but actually raises your effective APR.