What is add-on interest?

Add-on interest is calculated on the original principal and added to the total to be repaid. A 10% add-on rate on $10,000 for 2 years = $2,000 added for a $12,000 total. The true APR is approximately 18.5% — almost double the stated rate.

How do I compare different loan offers?

Always compare APR (Annual Percentage Rate), which includes fees in addition to interest. The Truth in Lending Act (TILA) requires all lenders to disclose APR, making it the standard comparison metric.

What are typical personal loan rates in 2024?

For good credit (720+): 7-12% APR. Fair credit (620-720): 13-20% APR. Poor credit: 20-36% APR. Credit unions and community banks often offer better rates than online lenders for borrowers with solid credit.

Personal Loan APR vs EIR Calculator

Calculate the true Effective Interest Rate (EIR) of a personal loan vs the stated APR. Some loans charge add-on interest which dramatically inflates the true cost.

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Frequently Asked Questions

What is add-on interest?

How do I compare different loan offers?

What are typical personal loan rates in 2024?