How to use this calculator
- Enter the loan amount, or switch to "Cash I need" and enter how much you need in hand — the calculator will gross up the loan amount to account for the fee.
- Enter the interest rate (the note rate) and the term in months.
- Enter the origination fee as a percent of the loan or a flat dollar amount, and choose whether it's deducted from your proceeds or added to your balance.
- Pick the first payment date.
- Open "Extra payments" to see how paying extra each month shortens the loan and saves interest.
How it's calculated
The monthly payment follows the standard level-payment formula, M = L × r(1+r)n ÷ [(1+r)n − 1], where L is the principal (the amount that accrues interest), r is the monthly interest rate, and n is the number of months.
An origination fee is a prepaid finance charge under Regulation Z, 12 CFR 1026.4(b)(1)–(2). When you choose "deducted," the fee is subtracted from the loan amount and you receive less cash upfront; the note amount (what accrues interest) stays the same. When you choose "added to the balance," the fee is added to the note amount and you receive the full loan amount, but you're paying interest on the fee itself over the term.
The true APR uses the Regulation Z actuarial method (12 CFR 1026.22(a)(1), Appendix J): it's the annual percentage rate that makes the present value of all your scheduled monthly payments equal the amount of cash you actually receive (the amount financed). For a loan with an origination fee deducted from proceeds, this APR is always higher than the stated note rate because the fee is part of the true cost of borrowing.
The total cost of borrowing is the sum of all scheduled payments minus the net proceeds you received — in other words, the origination fee plus all the interest. When the fee is financed (added to the balance), the total cost includes both the fee and the interest earned on the fee itself.
Full precision is kept month to month internally; only the numbers shown are rounded to the cent. The amortization schedule shows how much of each payment goes to interest and how much reduces the principal. Extra payments go entirely to principal and are applied with the next scheduled payment.
Assumptions
- The interest rate is fixed for the life of the loan — adjustable-rate personal loans aren't modeled.
- The origination fee is a one-time prepaid finance charge, not an ongoing fee. No other fees (late payment, returned-check, annual) are included in the calculation.
- Extra payments are applied with the next regular scheduled payment, not the very next business day.
- The calculator caps the term at 120 months (10 years), which covers the vast majority of personal loans. Most lenders offer terms between 12 and 84 months.
- Results are estimates for planning. Confirm the exact payoff date and any extra-payment strategy with your lender, since some apply extra principal only on request or on the next due date.
Frequently asked questions
What is an origination fee on a personal loan?
An origination fee is a one-time charge a lender imposes to issue the loan. It's a prepaid finance charge under Regulation Z, so it counts toward your true annual percentage rate (APR). The fee is either deducted from the amount you receive or added to your loan balance; either way, you're paying for it.
Should I choose "deducted" or "added to the balance" for the origination fee?
When the fee is deducted, you receive less cash upfront but the note amount (and your monthly payment) stay the same. When the fee is added to the balance, you receive the full loan amount, but your payment is higher and you pay interest on the fee itself. "Deducted" is more common for personal loans; "added to the balance" (financed) is more common for mortgages.
Why is my APR higher than the interest rate I was quoted?
The interest rate on your note is the stated rate used to calculate your payment. The APR is the true annual cost that includes the origination fee. Regulation Z requires lenders to disclose the APR so you can compare loans fairly — it's always equal to or higher than the note rate, because it factors in any prepaid finance charges.
What's the difference between the interest rate and the APR?
The interest rate (sometimes called the note rate) is the rate applied to your balance each month to calculate that month's interest charge. The APR (annual percentage rate) is the true annual cost of the loan as a percentage, including the origination fee. On a $15,000 personal loan at 11.5% for 36 months with a 3% origination fee deducted, the note rate is 11.5% but the APR is 13.625%, because you repay the full $15,000 plus interest while receiving only $14,550 after the fee comes out.
What does "net proceeds" mean?
Net proceeds is the actual amount of cash you receive. When the origination fee is deducted, the net proceeds are the loan amount minus the fee. When the fee is financed, the net proceeds are the full loan amount (because the fee is added to what you owe, not subtracted from what you get). This is the amount that matters for your budget.
How much does paying extra each month actually save?
It depends on your balance, rate, and remaining term. On a $15,000 personal loan at 11.5% for 36 months with a $150 origination fee (1% deducted), the regular monthly payment is $495. Adding $50 extra per month saves about $308 in interest and pays the loan off 3 months early.
Can I use the "Cash I need" mode to figure out how much to borrow?
Yes. If you need $10,000 in hand and the origination fee is deducted, you'd borrow more than $10,000 so that after the fee comes out, you still have $10,000. The calculator solves for the exact loan amount. This is called "grossing up" the loan amount.
Is the monthly payment fixed or can it change?
The monthly payment is fixed for the life of the loan. The calculator assumes a fixed interest rate, so your payment never changes — only the split between interest and principal changes each month as your balance shrinks.
What happens if I pay off the loan early?
You'll owe less interest because you're reducing the principal faster. Most personal loans have no prepayment penalty, so you can pay extra any time. Check your loan agreement or ask your lender if there's a prepayment penalty before making a large extra payment.
Where does the Regulation Z actuarial method come from?
Regulation Z is part of the Truth in Lending Act, a federal law that requires lenders to disclose the true cost of credit in a standard way. The actuarial method for calculating APR is set out in 12 CFR 1026.22(a)(1) and Appendix J; it's the approach every lender uses to compute the APR on your loan documents so you can compare offers across different lenders fairly.
Related calculators
Related guides
Key terms
Sources
- Consumer Financial Protection Bureau — Regulation Z, 12 CFR 1026.22 (APR calculation)
- eCFR — 12 CFR 1026.22, Appendix J (Regulation Z actuarial method)
- Consumer Financial Protection Bureau — Regulation Z, 12 CFR 1026.4(b) (finance charges)
- eCFR — 12 CFR 1026.4(b) (definition of finance charge)
- CFPB — What is the difference between a loan interest rate and the APR?
- CFPB — What is a prepayment penalty?
Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or legal advice or an offer of credit. Actual payments depend on your lender, loan terms, taxes, and insurance. Consult a qualified professional before making financial decisions.