Why is effective APR higher than the interest rate?

Effective APR factors in upfront costs like processing fees and GST. Since you pay interest on the full loan but receive a lower net amount, your real cost of borrowing increases.

Personal Loan True Cost

Discover the effective APR of your personal loan after processing fees and flat-rate markups.

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Quick Summary: Personal Loan True Cost

The true cost of a personal loan (APR) includes the stated interest rate plus processing fees (usually 0.5-4%) and 18% GST on those fees. A 12% flat rate loan is actually equivalent to a 21.2% reducing balance loan for a 3-year tenure, making it significantly more expensive than it appears.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.