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Published February 28, 2023
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8 minutes

Personal Loan Calculator

Use this personal loan calculator to compare the monthly and total cost of two personal loans, side by side. Just enter the loan amount, term and interest rate.
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How much does a personal loan cost?

The cost of a personal loan can vary quite a bit depending on multiple factors. Generally speaking, to calculate the cost of a personal loan, you need to know the following:

Interest rate

Loan interest rates are either fixed or variable. With fixed interest rates, your payments remain the same over the duration of your loan. Variable rates will fluctuate depending on your lender’s prime rate. 

Annual percentage rate 

The annual percentage rate (APR) represents the cost of a loan, over the course of a year. APRs are often higher than advertised interest rates, because they include fees and other costs, and in that way, they can help you choose between loan options.

Let’s say you want to get a personal loan for $5,000 and repay it over three years. You reach out to two lenders, and get the offers seen in the table below.

APR vs interest rate

Personal Loan 1Personal Loan 2
Interest rate10%11%
Lender fee$150 (3% fee)$100 (2% fee)
Monthly payment$161$164
Total interest$808$893

At first glance, the interest rates and monthly payments look very similar. But when the different lender fees are factored in, you can see that Loan 2 will end up costing you almost $100 more in interest over the life of the loan.

Nerd Tip: Pick the loan with the lowest APR for a given loan term, if you can, because it’s always the cheapest option. Note that APR loans in Canada can’t exceed 60%. However, payday lenders are exempt from this rule.

Additional fees

Depending on where you get your loan, there may be additional fees, including:

How to shop for a personal loan

When considering a personal loan, it’s always worthwhile to shop around. That’s because every loan is different. You want a loan that aligns with your goals and gives you options. Consider the following when comparing personal loan options:

Monthly payment and interest rate

Quite often, people considering a loan will focus on the monthly payment. This is a reasonable thing to do, as any amount of debt will affect your monthly budget. However, any loan can look affordable if you stretch out the terms. That’s why you need to look at both the monthly payment and how much you’ll be paying over the entire term.

For example, let’s say you’re considering a loan of $30,000, and you’ve been presented with three different quotes:

The first option gives you the lowest monthly payment, but you need to calculate the total cost of the loan over the course of the term, which would be as follows:

As you can see, going for the shorter-term loan with the higher monthly payment would actually cost you the least in the long run.

Additional considerations

Besides the interest rate and monthly payments, you’ll also want to consider the following when choosing a lender:

Always read the details of your loan contract before signing. If an offer sounds too good to be true, it probably is.

What can a personal loan be used for?

Personal loans in Canada can be quite flexible since you can use them for many different things. Some of the most common uses for a personal loan are as follows:

What a personal loan can’t be used for

Personal loans can be used for just about anything, but there are a few things they can’t be used for.

What’s a good interest rate on a personal loan?

Generally speaking, a good interest rate is the lowest rate you can get from a lender. That said, every lender has different criteria when determining if they’ll approve you for a loan and how much interest they’ll charge you. In most cases, lenders look at the following:

In most cases, if you have a good credit score and stable income, you’ll be approved for a personal loan with a lower interest rate. For those with a poor credit history or lower income, the terms offered for a loan may not be favourable.

Which lenders provide personal loans?

Many different lenders provide personal loans. While some are obvious, there are some lenders that you may not have been aware of that could offer you a loan that fits your needs.

Personal loan alternatives to consider

If you don’t want a personal loan or don’t qualify for one, you still have some options. It just depends on your personal situation and what you need the money for.

How Do I Get a Personal Loan? Cost, Eligibility and Credit Score

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To get a personal loan in Canada, you’ll have to meet common requirements around age, residency, income, and credit score.

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Personal Loan Rates in Canada

Personal Loan Rates in Canada

Personal loan interest rates can be either fixed or variable. Your rate depends on factors like your income, credit score, term, type of loan and more.

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Personal loans are funded quickly and feature lower interest rates than credit cards, but may be too restrictive for major home improvement projects.

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