Personal finance
Personal loan payment and APR calculator
Enter the amount, the nominal rate, the term and the fees: get the monthly payment, the APR that includes every cost, how much you pay back in total and how the balance falls month by month.
Nominal rate and APR: what a loan really costs
A loan payment is worked out with an annuity schedule: every month you pay the same sum, which at first is mostly interest and at the end mostly principal. The rate behind it is the nominal annual rate divided by twelve.
The nominal rate does not tell the whole story. Arrangement fees, per-payment charges, stamp duty and compulsory insurance all raise the cost, and the APR puts them into a single number: the rate at which what you actually receive equals everything you pay back. Lenders must show it on every offer, and it is the one to compare.
Example: 15,000 over 60 months at a 7.5% nominal rate gives a payment of about 300. With 250 of upfront fees and 2 per payment the APR rises to about 8.8%. Two offers with the same nominal rate can cost very different amounts.
Common mistakes
- Comparing offers on the nominal rate rather than the APR: fees can turn the ranking upside down.
- Looking only at the payment: a longer term lowers it but costs much more interest overall.
- Forgetting linked insurance: if it is required to get the loan, it is part of the cost.
Frequently asked questions
What is the difference between the nominal rate and the APR?
The nominal rate is the bare interest rate. The APR adds every compulsory cost and expresses them as an effective annual rate: it is always equal to or above the nominal rate, and it measures the real cost of the loan.
Is a longer loan with a lower payment better?
The payment falls, but total interest rises because the debt stays open longer. It is worth it only if the higher payment would strain the household budget.
Can I repay the loan early?
In most countries yes, often with a capped early-repayment fee and a reduction of the interest and costs not yet accrued. Check the contract for the exact terms.
How this calculation works
Payment = C × i / (1 − (1 + i)^−n), with C the amount, i = nominal rate / 12 and n the number of payments. Interest part = balance × i; principal part = payment − interest part. APR: find the monthly rate r for which C − upfront fees = Σ (payment + monthly costs) / (1 + r)^k, then APR = (1 + r)^12 − 1.