How the Loan Cost Calculator works
The interest rate on a loan only tells part of the story. The real number that matters is the total cost — every dollar you'll hand over by the time the loan is paid off, including interest and any fees charged to set up the loan.
This calculator adds your full amortized interest to any origination or other upfront fees to give you one bottom-line figure, plus that figure expressed as a percentage of what you actually borrowed, so you can quickly judge how expensive a loan really is relative to its size.
Comparing total cost side by side is often more useful than comparing rates alone, especially when offers have different fees or terms. If you want to compare two full offers at once, try the Loan Comparison Calculator.
A worked example
Borrow $20,000 at 7% over 5 years with $500 in upfront fees. The payment is $396.02, interest over the term is $3,761.44, and adding the fees puts the total cost of borrowing at $4,261.44 on top of the amount you received.
| Component | Amount |
|---|---|
| Amount borrowed | $20,000.00 |
| Interest over 5 years | $3,761.44 |
| Upfront fees | $500.00 |
| Total repaid | $24,261.44 |
| Cost of borrowing | $4,261.44 |
How to read your results
Cost of borrowing is interest plus fees — every dollar you pay beyond the principal. Total repaid is that cost plus the principal itself. Comparing the cost of borrowing across offers is the cleanest way to rank them.
When to use this calculator
Use it when a lender quotes a low rate but tacks on an origination fee, or when two offers have different fees and terms and you need one number to compare. It turns “3.99% plus a $600 fee” into an amount of money.
Common mistakes to avoid
- Judging a loan by its rate alone. A 6% loan with a big fee can cost more than a 7% loan with none.
- Overlooking fees rolled into the balance. If the fee is financed, you also pay interest on it.
- Ignoring the payoff plan. Paying early cuts interest but usually not the upfront fees, which are already spent.