Total Loan Cost Calculator Including Fees
This comprehensive calculator provides an accurate estimation of the total cost of a loan, factoring in the principal, total interest paid, and all associated fees (origination, processing, insurance, etc.). Use it to compare different loan offers and understand the **true financial commitment**.
Instant Results
Loan Statistics
Detailed Breakdown
Amortization Schedule
The full monthly breakdown will appear here.
The Importance of a Total Loan Cost Calculator
A loan is one of the most significant financial decisions an individual or business can make. However, focusing solely on the interest rate can lead to an inaccurate understanding of the true cost. Lenders often include various fees—origination, processing, underwriting, and more—that significantly inflate the final repayment amount. This Total Loan Cost Calculator is designed to provide a transparent, all-inclusive figure, allowing for genuine comparison shopping among different financing options. It moves beyond the standard amortization schedule to deliver the **all-in cost**.
How to Use the Calculator
Using the calculator is straightforward, but accuracy depends on entering all available details correctly:
- Loan Amount & Term: Enter the principal amount borrowed and the duration of the loan in years.
- Interest Rate: Input the Annual Percentage Rate (APR) as a percentage. This rate dictates the core interest calculation.
- Compounding Frequency: Most mortgages and personal loans compound monthly, but verify this detail.
- Fees: This is the crucial step. Enter all one-time fees (Origination, Processing, Other). These amounts are simply added to the total cost.
- Extra Payment: Inputting an optional extra monthly payment will calculate the shortened loan term and the subsequent reduction in total interest paid.
- Calculate: The tool will instantly provide the estimated monthly payment, total interest, total fees, and the ultimate total cost.
- $M$ = Monthly payment
- $P$ = Principal Loan Amount
- $i$ = Monthly interest rate ($APR / 12 / 100$)
- $n$ = Total number of payments (Term in years $\times 12$)
Understanding the Calculation Formula
The core of the calculation is the Amortized Loan Formula, which determines the periodic payment ($M$).
$$M = P \left[ \frac{i(1 + i)^n}{(1 + i)^n - 1} \right]$$Where:
The **Total Interest Paid** is calculated by multiplying the monthly payment by the total number of payments, and then subtracting the principal:
$$I_{Total} = (M \times n) - P$$The **Total Loan Cost** is the sum of the principal, the total interest, and the total fees:
$$Cost_{Total} = P + I_{Total} + Fees_{Total}$$This formula is the standard for calculating standard, fixed-rate, fully amortized loans. Adjustments are made in the code for different payment frequencies (biweekly, weekly) and for the impact of extra payments.
The Financial Importance of Fee Inclusion
An $100,000$ loan at $4\%$ APR for $15$ years has a base total interest of approximately $34,450$. If this loan comes with $4,000$ in one-time fees (origination, closing costs), the effective total cost is increased by almost $12\%$. Ignoring this $4,000$ leads to a severely underestimated cost. The fees are a sunk cost and must be factored into the decision-making process, especially when comparing a loan with a slightly lower APR but high fees versus a loan with a slightly higher APR but minimal fees. This calculator ensures you are comparing "apples to apples" based on the true financial output.
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