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Map · Fees and add-ons

A lower rate with a fee, or 18% with no fee?

$5,000 in your hand, repaid over 24 months. One offer charges 18% with no fee. The other offers a lower rate, but takes a fee out of the loan.

Over two years, one point of interest rate is worth how many percent of fee?

1.0%
0.0%5.0%
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The real number

1.0%

It is 1.0%.

Your guess—
The real figure1.0%

Below that, the lower rate wins. Above it, the fee costs more than the rate saves. A 16% loan with a 5% fee is $194 from the 18% loan with none.

Why so much?

Why

Find your square.

Rate with a feeFee 1%Fee 2%Fee 3%Fee 4%Fee 5%Fee 6%Fee 8%
17%$2$63$126$189$254$321$458
16%$56$5$66$130$194$260$396
15%$114$54$7$70$134$199$333
14%$171$112$51$11$74$138$272
13%$228$169$109$48$14$78$210
12%$285$227$167$107$45$18$149
  • The offer with the fee costs less
  • The no-fee offer costs less

Dark squares: the offer with the fee costs less. Light squares: the no-fee offer at 18% costs less. Each square shows how far apart they are over the full term.

Why the term matters

The fee is paid once, up front. The rate works every month. The longer the loan, the more months the lower rate has to earn back the fee.

Show me one move

One move

Compare the cost of borrowing, not the rate.

16% + 5% fee

$258a month
$1,185cost of borrowing

18%, no fee

$250a month
$991cost of borrowing

At 24 months the two tie when the fee is about 1.9% for a two-point rate gap. The 5% fee is well past that.

Fee deducted from the loan, equal cash in hand, no early payoff. Your lender's disclosures are the authoritative figures.

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Now yours

Your offer with a fee.

You borrow $5,263.16 to receive $5,000. $257.70 a month. Cost of borrowing $1,185: $263 fee and $922 interest.

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The whole story, as text

A lower rate with a fee, or 18% with no fee? The map at 24 months.

A lower rate with a fee, or 18% with no fee? $5,000 in your hand, repaid over 24 months. One offer charges 18% with no fee. The other offers a lower rate, but takes a fee out of the loan. Over two years, one point of interest rate is worth how many percent of fee?

The answer

1.0%. Below that, the lower rate wins. Above it, the fee costs more than the rate saves. A 16% loan with a 5% fee is $194 from the 18% loan with none.

Why

Find your square. Dark squares: the offer with the fee costs less. Light squares: the no-fee offer at 18% costs less. Each square shows how far apart they are over the full term. Why the term matters: The fee is paid once, up front. The rate works every month. The longer the loan, the more months the lower rate has to earn back the fee.

At 17%: 1% fee, no-fee offer by $2; 2% fee, no-fee offer by $63; 3% fee, no-fee offer by $126; 4% fee, no-fee offer by $189; 5% fee, no-fee offer by $254; 6% fee, no-fee offer by $321; 8% fee, no-fee offer by $458. At 16%: 1% fee, fee offer by $56; 2% fee, no-fee offer by $5; 3% fee, no-fee offer by $66; 4% fee, no-fee offer by $130; 5% fee, no-fee offer by $194; 6% fee, no-fee offer by $260; 8% fee, no-fee offer by $396. At 15%: 1% fee, fee offer by $114; 2% fee, fee offer by $54; 3% fee, no-fee offer by $7; 4% fee, no-fee offer by $70; 5% fee, no-fee offer by $134; 6% fee, no-fee offer by $199; 8% fee, no-fee offer by $333. At 14%: 1% fee, fee offer by $171; 2% fee, fee offer by $112; 3% fee, fee offer by $51; 4% fee, no-fee offer by $11; 5% fee, no-fee offer by $74; 6% fee, no-fee offer by $138; 8% fee, no-fee offer by $272. At 13%: 1% fee, fee offer by $228; 2% fee, fee offer by $169; 3% fee, fee offer by $109; 4% fee, fee offer by $48; 5% fee, no-fee offer by $14; 6% fee, no-fee offer by $78; 8% fee, no-fee offer by $210. At 12%: 1% fee, fee offer by $285; 2% fee, fee offer by $227; 3% fee, fee offer by $167; 4% fee, fee offer by $107; 5% fee, fee offer by $45; 6% fee, no-fee offer by $18; 8% fee, no-fee offer by $149.

One move

Compare the cost of borrowing, not the rate. 16% + 5% fee: $258 a month, $1,185 cost of borrowing. 18%, no fee: $250 a month, $991 cost of borrowing. At 24 months the two tie when the fee is about 1.9% for a two-point rate gap. The 5% fee is well past that. Fee deducted from the loan, equal cash in hand, no early payoff. Your lender's disclosures are the authoritative figures.

The same map at other terms: two, three and five years. The shorter the loan, the smaller the fee that tips it.

Yours

Which offer really costs less? runs these numbers for any loan. Nothing you enter leaves your browser.

Written and reviewed by Riverbend Crossroads Digital LLC, Friday, October 2, 2026. Figures from the Show Real Cost engine, computed exactly and shown to the cent. Educational, not advice; your lender's disclosures are the authoritative figures. How we calculate · Corrections.