Loans · Canada
Line of credit vs personal loan.
Borrow the same amount two ways. Compare monthly payment, total interest, total cost, payoff time and the APR once fees are counted.
Inputs
Comparison
Fill the form and press Compare.
How the comparison works
- Personal loan: fixed payment = P × i / (1 − (1 + i)−n), where i is the annual rate / 12 and n the number of months. The origination fee is deducted from the money you receive.
- Line of credit: each month interest = balance × rate / 12. Interest-only pays just that. The minimum-payment option pays the larger of the interest and your chosen % of the balance. Any balance left at the end of the term is counted as one final payment.
- APR with fees: the monthly rate at which the payments discount back to the cash you actually received (amount minus fees), found by bisection and multiplied by 12. If there are no fees it equals the stated rate.
What this is not
The APR with fees shown here is an internal-rate-of-return estimate. A Canadian federally regulated lender must disclose an APR calculated by the prescribed formula, APR = C / (T × P) × 100, where C is the cost of borrowing, T the term in years and P the average principal outstanding (Financial Consumer Protection Framework Regulations, s. 47), and the costs that count are listed in s. 48. The two figures can differ, so use your lender’s disclosure to compare real offers. Rates in the form are illustrative defaults, not current market rates.
Line of credit vs personal loan calculator FAQ
Is a line of credit cheaper than a personal loan?
It depends on the rate, fees and how you repay. Interest-only payments on a line are lower each month but never reduce the debt, so the balance is still owed at the end. Compare total cost over the same period, which is what this calculator does.
What is the APR with fees here?
The annualized internal rate of return (IRR) of the cash you actually receive (amount minus fees) against the payments you make, found by bisection. It is an effective-cost estimate. It is not the disclosure APR a Canadian lender must give you, which follows a prescribed formula.
What happens to the balance on an interest-only line?
Nothing: the balance stays the same. The calculator assumes you repay it in one lump sum at the end of the comparison term and counts that as the final payment for the APR calculation.
Why does the minimum-payment option take so long?
A payment set as a percentage of the balance shrinks as the balance shrinks, so the tail of the debt takes many months. The calculator shows both the payoff month inside the term and the months needed with no time limit.
Do real lines of credit compound monthly?
Many accrue interest daily on the outstanding balance and bill monthly. This tool uses rate / 12 each month, which is close for a steady balance. Variable rates also move with prime, which this tool holds constant.
Sources
- Financial Consumer Protection Framework Regulations, SOR/2021-181 (ss. 47 and 48), Justice Laws Website. Checked 2026-09-30.
- Loan payment formula: standard fixed-rate amortization, computed in this page’s script.
Disclaimer
This calculator provides estimates. It assumes constant rates, monthly compounding, no missed payments and no annual or late fees. Real lines of credit are variable and often payable on demand. Confirm terms and the disclosed APR with your lender.