Effective Borrowing Cost Calculator
Solve a monthly cash-flow rate from net loan proceeds, total interest and a compulsory upfront fee, with equal payments or interest-only repayment.
A QUICK WALKTHROUGH
How to use this tool
- Solve a monthly cash-flow rate from net loan proceeds, total interest and a compulsory upfront fee, with equal payments or interest-only repayment.
- Calculate
- Copy report / Download TXT
Formula and assumptions
A=L−F at time 0. Equal payments: Q=(L+I)/n at each month end. Interest-only: I/n each month plus L in month n. Solve A=Σₖ Qₖ/(1+j)^k for j≥0. Nominal annual=12j×100%; effective annual=expm1(12log1p(j))×100%; flat annual=100I/L/(n/12), excludes fees. Uniform months only. The interest/principal table is the contractual arithmetic split, not the IRR amortization.
Parsed inputs and units
Fee is withheld at advance, not added to principal or paid again. Total interest is an amount for the whole term, not a quoted annual rate. Loan principal must be positive and fee smaller than principal. All amounts share one currency. No dates, irregular payments, tax, optional fees, refund or statutory APR determination. The rate describes these cash flows and is not automatically a jurisdictional APR. Computation uses scaled present values, log discounts and bisection; precision/range failures are errors. Inputs and exports stay in this browser; 1200 rows is the display budget.
GOOD TO KNOW
Common questions
Is this a statutory APR?
No. It is the rate of the entered uniform monthly cash flows. Legal APR may require other fees, dates and disclosure rules.
Can a zero-interest loan have a cost?
A compulsory fee reduces the advance while payments remain based on the contractual principal. With both interest and fee zero, the rate is exactly zero.