What does your loan really cost?

How it's calculated

They tell you "the payment is $255", but that doesn't tell you what the money costs. This calculator starts from what you receive, the payment and the number of payments, and finds the rate that makes it all add up.

Total paid = payment × number of payments. Interest = total paid − amount received. The equivalent monthly rate is the rate i that satisfies: amount = payment × (1 − (1 + i)^−n) / i, which we solve by successive approximations. The effective annual rate is (1 + i)^12 − 1.

Example (the one that comes loaded): you receive $5,000 and pay 24 payments of $255. You pay $6,120 in total, $1,120 of cost, a monthly rate of 1.68% and an effective annual rate of about 22.2%. With payments of $225 ($5,400 in total) the rate drops to about 7.8%. In Paraguay, the central bank (BCP) publishes a maximum effective annual rate every month for loans in guaraníes: 27.26% in October 2026. Choose guaraníes in the currency menu and this calculator tells you which side of that cap you're on.

Watch out for this

• Always ask for the total cost and the effective annual rate in writing before you sign.
• Check whether there's insurance or fees on top of the payment: enter them in the fees field.
• If the bank shows you a "nominal" rate, it's not the same as the effective one: the effective rate includes how interest compounds.