What will this loan really cost?

Turn a loan quote into one comparable number, an APR, and the total it costs you in dollars, including fees.

Last checked: October 21, 2026Worked out in your browser, nothing stored

Lenders quote rates in different ways, which makes loans hard to compare. A flat rate charges interest on the whole amount for the whole term, even as you pay it off, so it looks much cheaper than it is. Fees can be taken from the money you receive, added to the loan, or charged every month.

This calculator works out every payment, then finds the monthly rate that makes what you receive equal to what you pay back, and multiplies it by 12. That is how the federal Truth in Lending rules (Regulation Z) work out an APR. Those rules do not cover business loans, so many lenders do not quote one; this puts every quote on the same footing.

APR

11.09%

Quoted as 9% a year

Total cost

$8,740

Interest and fees

Monthly payment

$1,589.99

For 36 months

Cash you receive

$48,500

After fees taken from the loan

Interest: $7,240
Fees: $1,500
Total you pay, including fees: $58,740

You receive $48,500 and pay $57,240 back over 36 months. The APR is the monthly rate that makes those two match, counting when each payment is made, times 12: the method in the federal Truth in Lending rules (Regulation Z). It is an estimate for comparing quotes, not a lender's offer.

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Worked example: A $50,000 loan over 3 years at 9% with a 3% origination fee

A made-up example, not a quote from any lender. The $1,500 origination fee is taken from the money paid out, so you receive $48,500 but pay interest on $50,000.

Loan amount: $50,000
Origination fee taken from the loan: $1,500
Cash you receive: $48,500
Interest: $7,240
36 monthly payments of: $1,589.99
Total cost (interest and fees): $8,740
APR: 11.09%

A 9% rate works out at an APR of 11.09%, because the origination fee comes out of the money you receive while interest is charged on the full $50,000.

Worth knowing

Ask for the total you will repay in dollars, as well as the rate, and check it against the result here.
Federal Truth in Lending rules do not cover credit for a business purpose, so federal law does not require a lender to show you an APR. California and New York require many lenders that are not banks to show one on business finance offers, and New York's must be worked out as under the federal rules. Each route page lists the rules that differ by state.
Where a lender does work out an APR under those rules, it counts as accurate within 1/8 of a percentage point of the exact figure (1/4 of a point for loans with several advances or uneven payments), so a quote and this result can differ by that much.
The result leaves out costs that are not paid in money, such as a personal guarantee or a lien on your assets, and any charge for paying the loan off early.
If the rate is variable, the result only holds while the rate stays the same.

Routes this works for

Sources

12 CFR 1026, Appendix J (Regulation Z): annual percentage rate computations for closed-end credit · checked October 20, 2026
12 CFR 1026, Appendix J in the Code of Federal Regulations, annual edition of January 1, 2025 (equations and worked examples) · checked October 20, 2026
12 CFR 1026.22 (Regulation Z): determination of annual percentage rate · checked October 21, 2026
12 CFR 1026.3 (Regulation Z): exempt transactions, including business credit · checked October 21, 2026
California Financial Code, Division 9.5: Commercial Financing Disclosures (sections 22800 to 22807) · checked October 17, 2026
New York Financial Services Law section 804: closed-end commercial financing disclosure requirements · checked October 17, 2026

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