Monthly Interest Rate Calculator

Not all online lenders are transparent about their interest rates. Find out the true monthly rate and total borrowing cost of your loan using this calculator.

True Cost of Borrowing Calculator

Amount deducted from your proceeds or paid upfront.
True Monthly Rate
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Effective Annual Rate (EIR)
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Total Cost of Borrowing
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How to Use the True Monthly Interest Rate Calculator

Lenders often advertise low monthly “add-on” rates while hiding the true cost of a loan behind upfront deductions and processing fees. This calculator reverse-engineers the math to show you exactly what you are paying.

Here is how to calculate your real interest rate:

  • Select your currency: choose your preferred currency from the dropdown
  • Enter the stated Loan Amount: input the total amount you are applying for (the “gross” loan amount)
  • Input the upfront Processing Fee: enter any origination fees, admin fees, or deductions the lender takes before depositing the money into your account.
  • Set the Loan Term: enter the number of months you have to pay the loan back (you can use decimals for partial months, like 9.5).
  • Enter the estimated Monthly Payment: input the exact monthly installment the lender quoted you

The calculator will instantly crunch the numbers to reveal the true math behind your loan offer.

Special Features

The Interactive Doughnut Chart

Tells you the % breakdown of the principal, fee and interest

The visual breakdown shows you exactly where your money is going over the life of the loan.

  • The Green Section (Net Received): This is the actual cash that lands in your hands.
  • The Yellow & Red Sections (Sunk Costs): This represents the money you are losing to the bank through upfront fees and interest.
  • Hover over any section of the doughnut to see the exact monetary value of that slice.

Definition of Terms

Understanding these financial terms is the key to comparing loan offers effectively:

  • EIR (Effective Annual Interest Rate): This is the most important number. It represents the true, annualized cost of your loan, factoring in the compounding interest and the impact of upfront fees. It is almost always significantly higher than the lender’s advertised rate. Always compare loans by their EIR.
  • True Monthly Rate: The actual percentage of interest you are paying per month on the money you actually received (your net proceeds), rather than the inflated gross loan amount.
  • Total Cost of Borrowing: The absolute total out-of-pocket expense for taking the loan. This is the sum of all interest paid over the term, plus the initial processing fees.
  • Net Received: The actual cash deposited into your bank account after the lender deducts their processing fees from your stated loan amount.

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