Finance Charge Calculator

Under the Truth in Lending Act (Regulation Z, 12 CFR 1026.4), the finance charge is the cost of consumer credit expressed as a dollar amount. It includes interest plus any charge the creditor imposes as a condition of the credit, such as origination fees. It does not include charges of a type payable in a comparable cash transaction.

Finance charge = total of all payments - amount financed. Example: borrow $10,000 at 12% APR for 36 months. The monthly payment is $332.14, so the total of payments is $11,957.15. Finance charge = $11,957.15 - $10,000 = $1,957.15.

APR is the cost of credit expressed as a yearly rate; the finance charge is the same cost expressed in dollars. In the $10,000 / 12% / 36-month example, the APR is 12% and the finance charge is $1,957.15. Two loans can share the same APR but have different finance charges if their amounts or terms differ.

Most cards use the periodic-rate method: finance charge = average daily balance x (APR / 365) x days in the billing cycle. Example: a $2,000 balance for 14 days, then $1,200 for 16 days after an $800 payment, at 24% APR over a 30-day cycle. Average daily balance = $1,573.33, and the finance charge = $1,573.33 x 0.24 / 365 x 30 = $31.04.

Origination fees, loan-processing fees, required credit insurance, and mortgage broker fees generally count as finance charges. Charges excluded include fees payable in a comparable cash transaction (for example, a standard appraisal fee you would pay with cash too) and certain third-party closing costs the creditor does not require or retain. When in doubt, this calculator lets you add any fee either upfront or financed and shows the effect both ways.

It depends on how the fee is paid. Financed into the loan: amount financed becomes $10,300 at 12% for 36 months, monthly payment $342.11, total $12,315.87, finance charge = $12,315.87 - $10,300 = $2,015.87, and the effective APR rises to 14.07%. Paid upfront out of pocket: the finance charge becomes $1,957.15 + $300 = $2,257.15 and the effective APR is 14.13%.

The effective APR (actuarial method) is the rate that equates what you actually receive to your payment stream. Fees reduce what you receive without reducing your payments, so the true rate rises. Example: $10,000 at 12% nominal for 36 months with a $300 upfront fee means you net $9,700 while paying $332.14 per month - the effective APR is 14.13%, not 12%.

Yes. Fees alone create a finance charge. Example: $10,000 at 0% APR for 36 months with a $300 upfront fee. The monthly payment is $277.78, the total paid is $10,000.00, and the finance charge is $300.00 - the fee itself. The effective APR in this case is 1.99%.

Multiply principal x APR x years. Example: $5,000 at 8% APR repaid in one lump sum after 1 year. Finance charge = $5,000 x 0.08 x 1 = $400.00, so the total due is $5,400.00.

A $1,000 balance at 18% APR over a 30-day billing cycle with no payments: finance charge = $1,000 x 0.18 / 365 x 30 = $14.79, making the new balance $1,014.79.

No - this is an explicit boundary. This calculator covers finance charges under the Truth in Lending Act: the dollar cost of borrowing (interest plus credit fees). It does not convert units of electric charge such as coulombs, ampere-hours, or elementary charges. For unit conversion of electric charge, use a dedicated charge converter tool instead.

No. Results are estimates for education and comparison shopping only, not professional financial advice. Lenders' exact methods (day-count conventions, fee classifications under Regulation Z) can differ slightly. Consult a licensed financial professional before signing any credit agreement.