Annual Cost of Credit Calculator
Enter the balance, APR, annual fee and your monthly payment.
Cost in the first year
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Enter values above
Months to clear the balance
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Total interest paid
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Total paid
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Interest paid in year one
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Effective cost of the balance
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Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Balance ($) | 5000 |
| APR (%) | 22 |
| Annual fee ($) | 0 |
| Monthly payment ($) | 150 |
| Result | Value |
|---|---|
| Cost in the first year | $1,025 |
| Months to clear the balance | 52 |
| Total interest paid | $2,798 |
| Total paid | $7,798 |
| Interest paid in year one | $1,025 |
| Effective cost of the balance | 20.50% |
Values shown are produced by this page in your browser; change any input to update them.
How to use the Annual Cost of Credit Calculator
- Balance ($) — default 5000
- APR (%) — default 22
- Annual fee ($) — default 0
- Monthly payment ($) — default 150
- Press Calculate to update the results instantly.
Frequently asked questions
Because the balance falls as you pay it down. The interest is charged on a declining balance, so year one costs less than the APR suggests — but the total interest over the life of the debt is much larger.
If the monthly payment is less than balance × monthly rate, you never clear the debt — it grows. The calculator reports “Never clears” in that case.
Legally the APR must include most fees, but a separately charged annual fee is still real money. Enter it here so the first-year cost is complete.