Example 1 — Short loan
- Amount: 5,000
- Rate: 10%
- Term: 12 mo.
Interest 500 · Total 5,500
Cost 10% of amount
Sketch: 5,000 × (10%/12) × 12. A short term limits cost in this model.
Cost of Loan
A light educational loan-cost sketch: simple interest on the amount (+ optional one-time fee). Intentionally lighter than total cost of loan, APR, and instalment tools.
Cost of loan = simplified cost sketch (simple interest). Total cost of loan = richer all-in. APR (simplified) = annualised estimate (not statutory APRC). Loan instalment = monthly annuity payment. Amounts follow the header currency.
Result
Enter data and click Calculate.
How results are calculated
Interest = amount × (rate ÷ 100 ÷ 12) × months — simple interest on the full principal (no amortisation).
Total repayment = amount + interest + optional one-time fee.
Cost as % of amount = (interest + fee) ÷ amount × 100%. Not APR/RRSO and not an annuity instalment.
How to use the calculator
- Enter the loan amount in the header currency.
- Enter the annual interest rate (%) from the offer.
- Set the term in months.
- Optionally add one fee under Advanced.
- Read interest, total, and cost as % of amount — for all-in offers, APR, or monthly payment use the related tools.
Usage examples
Example 2 — Longer term
- Amount: 15,000
- Rate: 12%
- Term: 36 mo.
Interest 5,400 · Total 20,400
Cost 36% of amount
A longer term raises cost at the same rate (still without amortisation).
Example 3 — High rate + fee
- Amount: 8,000
- Rate: 18%
- Term: 24 mo.
- Fee: 200
Interest 2,880 · Total 11,080
Cost 38.5% of amount
A fee raises cost beyond interest — use total cost of loan for richer all-in; loan instalment for the payment.
When NOT to use this calculator
- If you need a full all-in cost (instalments, interest and fees outside the instalment) – the Total cost of loan calculator is a better fit.
- If you care about the monthly instalment amount for a given term and rate – use the Loan instalment calculator instead of this simple cost sketch.
- If you want to compare offers using a yearly % cost – use the simplified APR estimate calculator rather than this one.
Remember: the cost as a percentage of the amount ((interest + fee) / principal) is not the same as APR/APRC. It is meant as a quick educational sketch, not a formal comparison metric.
FAQ
How is this different from total cost of loan?
Cost of loan is a light simple-interest sketch (optional one-time fee). Total cost of loan is the richer all-in tool: payment, interest, and fees outside the instalment.
How is this different from APR/RRSO?
This is not statutory APRC. It uses simple interest on the full principal. The on-site APR calculator is a separate simplified annual measure — also not official APRC.
How is interest calculated?
Simple interest: amount × (rate ÷ 100 ÷ 12) × months — no principal amortisation and no interest-on-interest.
Is this an annuity instalment?
No. It is a total cost estimate. Use Loan instalment for the monthly annuity payment.
What does cost as % of amount mean?
Estimated borrowing cost (interest + optional fee) divided by the amount borrowed × 100%. Not APR/RRSO.
What is the optional one-time fee for?
A single fee added to the total so the model can show costs beyond interest. It does not turn this into a full all-in offer calculator.
Why might the result differ from a bank offer?
Lenders add more fees, insurance, and amortise principal — this is an intentional teaching shortcut.
Which related tools help?
Total cost of loan (all-in), APR simplified (annual measure, not statutory APRC), and Loan instalment (monthly annuity payment).