Total Cost of Borrowing Calculator
This calculator estimates the full dollar cost of a loan — interest plus fees and charges — rather than the interest rate alone. It answers what the credit costs over the term you enter, not what you would qualify for.
$2,360.31 total cost of borrowing
Canadian cost-of-borrowing disclosure is meant to state the total cost, not just the interest rate. Insurance and optional add-ons belong in the fees box if you take them.
How the calculator works out a total cost of borrowing
The calculator answers one narrow question: if you borrow a set amount, pay a set annual interest rate for a set number of years, and pay a known set of fees and charges over that same period, what does the loan cost you altogether? It splits that cost into its two halves — interest and everything that is not interest — and then puts them back together into a single figure and a cost-per-$100 rate you can compare across loan sizes.
The arithmetic runs in three steps. First, the interest estimate: multiply the amount advanced by the annual interest rate, then by the term in years. Second, add the fees and charges you entered, as one flat amount. Third, add the two together to reach the total cost of borrowing, then divide that total by the amount advanced so it can be restated per $100 borrowed. That last step is what makes two very different loans comparable: a small loan with heavy fees and a large loan with a modest rate can land at the same cost per $100, and the output will show it.
Canadian law puts an outer wall around lending costs. The Criminal Code makes it an offence to charge interest at a criminal rate, defined there as an effective annual rate above 35% per year; the definition is set out in section 347 of the Criminal Code. Payday-style credit is handled separately: where a province operates a licensed payday lending regime, the federal Payday Lending Regulations (SOR/2024-114) cap the cost of borrowing at $14 per $100 advanced. Some provinces set a lower cap, and the lower cap applies. Quebec does not license payday lending, which effectively prohibits the model there.
Neither of those figures is a rate you will be offered. They are legal boundaries. What any individual borrower is quoted depends on the lender, the province, the product and the borrower's own file.
What each input means
Enter the four inputs as they appear in the loan agreement, not as you remember them.
- Amount advanced — the principal actually handed over or deposited, not the total you will repay, and not the face value of the loan if a fee is deducted before the money reaches you.
- Annual interest rate (%) — the nominal annual rate stated in the agreement, before fees. Leave fees out of this field; they have their own input, and counting them in both places inflates the answer.
- Term (years) — how long the balance is outstanding. A 24-month loan is 2; a 9-month loan is 0.75. The calculator reads whole or fractional years, not months.
- Fees and charges over the term — every mandatory charge that is not interest: administration, origination, brokerage, document or discharge fees, and any insurance the lender requires as a condition of the loan. If a charge is genuinely optional, leave it out, or run the calculation twice to see both versions.
What the result does and does not tell you
What it tells you: the approximate dollar cost of the credit if the rate holds and the fees land as entered, how much of that cost is interest and how much is everything else, and a per-$100 figure you can hold next to another loan's per-$100 figure. It is a comparison tool, not a quote.
What it does not tell you: whether you will be approved, what rate a lender would actually offer you, when payments would fall due, or what happens if you pay late or pay the loan off early. The result is not an offer, not an approval and not a disclosure document. loanmoose.ca is not a lender. It does not make loans, set rates or make credit decisions; it matches and compares, and any real terms come from the lender that issues them. Lending in Canada is licensed provincially, so the regulator, the permitted charges and the disclosure rules differ depending on where you live — the Financial Consumer Agency of Canada maintains a list of provincial and territorial regulators that is worth checking before you sign anything.
The assumptions the arithmetic rests on
The headline result assumes all of the following, and it will drift from reality wherever one of them fails:
- The rate is fixed for the whole term and no payment is made until the end, so interest accrues on the full amount advanced for the full period.
- Interest is not compounded. Canadian fixed-rate mortgages are compounded semi-annually by law, so mortgage figures will not match this arithmetic.
- Every fee is known in advance, charged once and mandatory. Contingent charges, penalties and late fees sit outside the model.
- No taxes, no optional insurance you chose rather than were required to buy, and no third-party costs are included unless you typed them in yourself.
- The term is entered in years, and every year is treated as the same length.
For a plain-language explanation of how borrowing costs are disclosed and what a loan agreement should show you, the Financial Consumer Agency of Canada's material on personal loans and on debt and borrowing is a reasonable starting point. What is right for your situation depends on your income, your existing obligations and your province, and no calculator can decide that for you.
Frequently asked questions
What does total cost of borrowing mean?
It is the full dollar amount you pay for credit beyond the principal: all interest plus every mandatory fee and charge attached to the loan over its term. It is a total, not a rate, which is why two loans advertised at the same interest rate can carry very different totals.
Does the calculator include fees, or only interest?
It includes both. Interest is estimated from the amount advanced, the annual rate and the term. Fees and charges are added as a flat amount that you enter yourself, because only you know what the agreement lists. Leaving that field at zero gives an interest-only answer that understates the real cost.
Is the total cost of borrowing the same as the interest rate?
No. The interest rate is one input; the total cost is an output that also folds in fees and charges. A loan with a lower rate and expensive fees can cost more overall than a loan with a higher rate and few fees. Converting both to a cost per $100 borrowed is how you see that.
Why does the calculator not match the figure my lender quoted?
Lenders amortize loans, apply their own compounding schedule, and may categorize chargeable fees differently. This calculator assumes simple interest on the full amount advanced for the whole term. A small change in any of those assumptions moves the total, and your signed agreement is the authoritative version.
Does a lower total cost of borrowing mean I will be approved?
No. Cost and eligibility are separate questions. A lender decides whether to lend using its own criteria, which typically include income, existing debts and credit history, and it confirms your information before funding. This calculator checks none of that, and nothing it produces is an approval or a promise of one.
Are payday loans calculated differently?
Yes. Payday-style credit is generally up to $1,500 for a term of 62 days or less, and it sits under its own regime rather than ordinary interest calculations. Where a province licenses the model, the federal cap is $14 per $100 advanced; some provinces set a lower cap, and Quebec does not license payday lending at all.
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