Rate tool
Cash loan: real-APR calculator
Flat monthly fee plus an upfront service charge: you receive less principal, so the effective annualized cost climbs further.
Worked example only — the figures on this page are not a real product quote.
Effective annual cost (IRR)
22.16%
Nominal (fee × 12)
9.60%
The quoted 9.60% understates the real 22.16% — a 2.3× gap. You only owe about half the principal on average, while the fee is charged on the full amount.
Monthly payment
913.33
Total paid
11,110
Total cost
1,110
Monthly IRR
1.682%
Your balance shrinks — the fee does not
Each bar is the principal you still owe at the start of that period. The monthly fee stays fixed on the full original amount, which is why the real annualized cost is roughly double the sticker.
Showing every period.
Why the quoted fee rate understates the real cost
In an equal-installment plan the fee is charged on the original principal every period, but your outstanding balance shrinks month by month. Paying a 0.6% monthly fee for 12 months does not equal a 7.2% annual rate — the effective annualized cost is roughly 13.8%. Add an upfront service charge and the gap widens further.
Frequently asked
Where do I find the monthly fee rate?
Look for 'fee per period' or 'monthly fee rate' on the installment page or statement, e.g. 0.6%. If only the monthly payment is shown, back it out: (payment × months − principal) ÷ principal ÷ months.
Is a 0.6% monthly fee equal to a 7.2% annual rate?
No. Equal-installment plans charge on the original principal while the balance shrinks — the IRR-effective annualized cost is roughly 13.8%.
What is the IRR annualized figure?
It discounts each cash flow to solve the monthly rate making NPV zero, then compounds to 12 months — close to the regulatory effective-cost measure.
Does an upfront fee change the effective APR?
Yes. The fee is deducted at disbursement — you receive less principal while payments stay the same, so the effective annualized cost rises.
Further reading
APR vs Monthly Installment Fees: Why a Low Monthly Fee Means a Much Higher Yearly Rate
Estimates only, using the equal-installment model (each payment = principal ÷ months + principal × monthly fee; upfront charges deducted from what you receive). Not borrowing or investment advice.