Published: 2026-10-05 · Reviewed: 2026-10-05
How to calculate the total cost of an online loan
The advertised rate is only one part of borrowing cost. A useful comparison starts with the same amount and term, then adds every mandatory charge and checks the total repayment.
Use the same borrowing scenario
Choose the amount you actually need and compare products over similar repayment periods. A longer term may reduce each payment while increasing the overall cost.
List interest and mandatory fees separately
Write down interest, processing charges and any other required cost. Compare the sum with the lender’s stated total repayment rather than relying on a headline rate.
Convert percentages into money
A percentage is easier to judge when you can see the actual amount it adds to your repayment. For short-term products, the cash difference between the amount received and amount repaid can be especially informative.
Check repayment dates
Make sure the due dates fit your income schedule. Also read the rules for early repayment, missed payments and any additional charges that can apply after a delay.
Record these figures
- amount received
- repayment term
- interest
- mandatory fees
- total repayment