| Amount | Rate (%) | Term (years) | Total cost | % of borrowed amount | Total amount to repay | Note |
| {y} |
Calculate the Total Cost of a Loan (Convert a Percentage into a Real Cost)
This free simulator lets you very quickly calculate the real cost of a loan or credit over several years.
With this online tool, you will know exactly how much interest goes to the bank based on the offered rate.
Why use a loan cost simulator?
When you take out a loan, the bank's interest rate doesn't tell the whole story. It is often useful to convert this percentage into a real cost. Things become clearer that way. And the choice becomes better informed, because it lets you compare different offers on a fair basis.
How to calculate the real cost of a loan
To use this simulator, just enter the loan amount, the annual interest rate (as a percentage) and the term of the loan (in years). The simulator then automatically calculates the total cost of the loan as well as the total amount to repay.
Example calculation
For example, for a $150,000 home loan at a 4% rate over 25 years, the total cost of the loan is $87,526.58, which brings the total amount to repay to $237,526.58.
In other words, at the end of the 25 years, you will have paid $87,526.58 in interest to the bank, or about 58% more than the initially borrowed principal ($150,000).
Compare loan offers
By using this simulator to calculate the real cost of a loan, you can compare different loan offers with one another. Indeed, some banks may offer lower interest rates but with higher additional fees. The total cost of the loan can therefore be higher despite a lower interest rate.
Comparison example
- Offer A: 2.5% over 25 years, total loan cost of $50,000 for a borrowed amount of $100,000.
- Offer B: 3% over 20 years, total loan cost of $50,000 for a borrowed amount of $100,000.
In this example, although "Offer A" has a lower interest rate than "Offer B", the total cost of the loan is $740.80 higher, mainly because of the loan term.
Keyboard shortcuts
You can use keyboard keys to save time.
m ⇝ Clear
f ⇝ Save
Save your calculations
You can save your calculations to the history by clicking the Save button or by using the f keyboard shortcut. This lets you keep a record of your calculations.
Purpose of this simulator
This tool was designed to let you concretely visualize what a loan represents in terms of total cost, so you can make informed decisions before committing.
It is in no way personalized financial advice, but simply a practical way to better understand the impact of a loan.