2 min read
Estimates an annualised cost including fees so you can compare offers like-for-like. Illustrative, not a statutory APR.
Step 1: total the repayments
Multiply the monthly repayment by the number of payments over the term, or add up the schedule. This gives the total you will hand over across the life of the loan — principal and interest combined.
Step 2: subtract the principal
Take off the amount you actually borrowed. What remains is the interest — the core cost of the borrowing. This is where a longer term quietly adds up, because more months mean more interest even at the same rate.
Step 3: add the fees
Add any arrangement fee, drawdown charge or other mandatory cost. The result is the total cost of credit — the honest, all-in price of the loan, and the number to compare offers on.
Step 4: compare like for like
Work the total cost for the same amount and term across each offer, and compare. Watch for a flat rate, which must be converted first. See how to compare offers.
Get the figure
Use the calculator to compute the total cost instantly for any amount, rate and term.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Frequently asked questions
How do I work out the total cost of a loan?
Total all the repayments over the term, subtract the amount you borrowed to get the interest, then add any mandatory fees. The result is the total cost of credit — the true, all-in price of the loan.
Why does a longer term cost more?
Because more months means more interest, even at the same rate. When you subtract the principal from the total repayments, a longer term leaves a larger interest figure — the quiet cost of spreading a loan out.
How do I compare loans on total cost?
Work out the total cost for the same amount and term across each offer, converting any flat rate to a reducing-balance basis first, then compare. The lowest all-in cost is usually the better loan.
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