💳 Borrowing Cost

Loan Interest Calculator Canada

See your exact payment amount, total interest cost, and the full breakdown of any Canadian loan or line of credit.

How much does borrowing really cost in Canada?

The advertised interest rate on a loan only tells part of the story. This calculator shows you the total interest you'll pay over the full term — whether it's a car loan, personal loan, student line of credit, or HELOC. Switching from monthly to bi-weekly payments can meaningfully reduce the total cost of borrowing on longer-term loans.

Loan Details
Loan Amount
$0
$
Annual Interest Rate
7.00%
Loan Term (Years)
5 yrs
Payment Frequency
Total Interest Paid
$0
–
Payment Amount
Your regular payment based on the frequency selected — the amount due each month, bi-week, or week until the loan is fully paid off.
$0
Total Payments
The true total cost of this loan — every dollar of principal borrowed plus every dollar of interest paid over the full term.
$0
Principal vs interest paid — by year

📉 Shop Your Rate

A 1% difference in interest rate on a $25,000 car loan over 5 years saves about $650 in interest. Always get quotes from your bank, a credit union, and the dealer before signing.

⚠️ Lines of Credit

HELOCs and lines of credit have variable rates tied to prime. When rates rise, your minimum payment stays the same but more goes to interest — meaning it takes longer to pay off.

💡 Prepay When You Can

Most Canadian personal loans allow early repayment. Even a single extra payment per year can save significant interest over a 5-year term without triggering penalties.

Frequently asked questions

Most Canadian personal loans and car loans use simple interest calculated on the outstanding balance each period. Each payment covers the interest accrued since the last payment, with the remainder reducing the principal. Early in the loan, most of each payment goes toward interest; as the principal shrinks, more of each payment goes toward principal — this is called amortization.

In 2026, a good personal loan rate depends heavily on your credit score:

  • Excellent credit (750+): 7–11%
  • Good credit (700–749): 11–16%
  • Fair credit (650–699): 17–25%
  • Below 650: 25%+

Credit unions typically offer more competitive rates than major banks for personal loans. Always compare at least 3 lenders before signing.

A shorter term means higher monthly payments but much less total interest. On a $20,000 loan at 10%:

  • 3 years: $645/month — total interest $3,218
  • 5 years: $425/month — total interest $5,496

The 5-year saves $220/month but costs $2,278 more in total interest. Choose the shortest term your budget comfortably supports.

Yes — since interest is calculated on your outstanding balance, every dollar you pay down early reduces future interest charges. However, some lenders charge a prepayment penalty for paying off early — check your loan agreement before making extra payments. Most personal loans allow prepayment with no penalty; some car loans and mortgage-backed loans may not.

A car loan is secured by the vehicle — the lender can repossess it if you default, which means lower rates (typically 6–12% for good credit). A personal loan is unsecured, with higher rates but more flexibility — you can use it for any purpose including private vehicle sales. The penalty for breaking a car loan mid-term is usually smaller than for a mortgage but larger than most personal loans. See our car loan vs personal loan guide for a full comparison.

Canadian credit cards typically charge 19.99–22.99% compounded daily. A $5,000 balance making minimum payments can take over 10 years to pay off and cost nearly $8,000 in interest — more than the original debt. This is why paying off high-interest credit card debt before investing almost always makes mathematical sense: you're guaranteed a 20%+ return by avoiding the interest charges.