Enter your loan details to see the difference between nominal and effective annual rates — and calculate exactly how much you'll pay in total interest.
The nominal annual rate (TNA) is the base interest rate stated in your contract. The effective annual rate (TEA) accounts for compounding — the fact that interest accrues on previously accumulated interest.
When interest compounds monthly (as most consumer loans do), the effective annual rate is always higher than the nominal rate. The difference grows with the rate itself.
This calculator uses the stated nominal rate only. Your actual contract may include additional fees and charges that further increase the true cost. Bring your contract to a session for a complete analysis.
The fixed amount due each month under a standard amortizing loan structure.
The true annual cost of the loan after accounting for monthly compounding. Compare this across your different obligations.
The total amount you pay above the original loan — the real cost of borrowing this money over this period.
Online calculators have limitations. Here's what you need a full contract analysis to understand.
Most consumer credit contracts include origination fees, monthly administrative charges, and mandatory insurance. These are not reflected in the nominal rate but significantly increase your total cost.
Some contracts allow the lender to adjust the rate under certain conditions. Understanding these clauses requires reading the specific contract language, not just the headline rate.
If you want to pay off a loan early, many contracts include prepayment penalties that reduce or eliminate the interest savings. The calculator cannot account for your specific penalty terms.
For a complete analysis of your specific contracts, join one of our training sessions.
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