Borrowing Cost Calculator

Use our free borrowing cost calculator to understand the true total cost of any loan. Factor in interest charges, origination fees, monthly fees, and closing costs to see your effective borrowing cost.

Financial

Currency

Loan Amount

Annual Interest Rate (%)

Loan Term (months)

months

Origination Fee (%)

Monthly Service Fee

Closing Costs

Formula

The true cost of a loan goes beyond just the interest rate. Origination fees, monthly servicing fees, and closing costs all add to your total borrowing cost.

Total cost = Interest + Origination fee + Monthly fees x term + Closing costs; Effective APR = Total cost / Loan amount / Years

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter the loan amount and interest rate.
2Enter the loan term in months.
3Add any origination fee percentage, monthly fees, and closing costs.
4The calculator shows total interest, total fees, and effective APR.

Examples

$25,000 at 7% for 60 months with 2% origination + $500 closing

1.Interest: ~$4,638
2.Origination fee: $25,000 x 2% = $500
3.Closing costs: $500
4.Total cost: $5,638
5.Effective APR higher than 7%

Result: $5,638 total borrowing cost

Frequently Asked Questions

Interest rate only covers the cost of borrowing the principal. Effective APR includes all fees and costs, giving you the true annual cost of the loan.

Not necessarily. A loan with a lower interest rate and small origination fee may still be cheaper than a no-fee loan with a higher rate.

Origination fees, application fees, closing costs, monthly service fees, prepayment penalties, and any other charges the lender applies.

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Understanding Loan Costs

CalculateMe Team

Last updated: 2026-07-17

Frequently Asked Questions

Interest rate only covers the cost of borrowing the principal. Effective APR includes all fees and costs, giving you the true annual cost of the loan.

Not necessarily. A loan with a lower interest rate and small origination fee may still be cheaper than a no-fee loan with a higher rate.

Origination fees, application fees, closing costs, monthly service fees, prepayment penalties, and any other charges the lender applies.

Borrowing Cost Calculator

Formula

How It Works

Examples

$25,000 at 7% for 60 months with 2% origination + $500 closing

Frequently Asked Questions

What is the difference between interest rate and effective APR?

Should I avoid loans with origination fees?

What fees are typically included in borrowing costs?

Related Calculators

Related Articles

Borrowing Cost Calculator

Formula

How It Works

Examples

$25,000 at 7% for 60 months with 2% origination + $500 closing

Frequently Asked Questions

What is the difference between interest rate and effective APR?

Should I avoid loans with origination fees?

What fees are typically included in borrowing costs?

Related Calculators

Related Articles