APR Calculator

Find the real yearly cost of a loan once upfront fees are counted. The APR calculator compares the APR with the stated rate and shows the monthly payment and total cost.

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Origination, points, and other charges

APR
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Estimate only. Not financial advice.

How to use the APR Calculator

  1. Enter the Loan amount, the Stated interest rate, and the Term in months.
  2. Enter the total Upfront fees: origination fees, points, and other charges.
  3. Press Calculate. The APR appears next to the stated rate, with the payment and the total cost of borrowing.

How it works

payment = amount × i ÷ (1 − (1 + i)^−n)   with i = stated rate ÷ 12
APR = 12 × x, where x solves: payment × (1 − (1 + x)^−n) ÷ x = amount − fees

You make payments on the full amount, but you only receive the amount minus fees. The APR is the rate that links those two. There is no closed formula, so the calculator narrows it down by bisection.

Examples

  • $10,000 at 5% for 36 months with $500 in fees: 8.459% APR.
  • A $200,000 mortgage at 6.5% for 30 years with $4,000 in fees: 6.695% APR.

Why short loans show bigger APR jumps

The same fee is spread over fewer payments on a short loan, so it adds more to the yearly rate. A $500 fee lifts a 3-year $10,000 loan from 5% to about 8.5%, while $4,000 on a 30-year mortgage adds less than a quarter of a point.

Limitations

  • Only fees paid upfront are counted. Insurance and monthly fees are left out.
  • Uses the US-style APR (nominal, monthly compounding). Some countries publish an effective rate instead.
  • Lenders may include or exclude certain fees differently in their legal APR.

Frequently asked questions

What is the difference between APR and interest rate?

The interest rate prices the money you borrow. APR adds upfront fees, so it shows the full yearly cost.

Is a lower APR always better?

For the same term, yes. Across different terms, compare the total cost as well.

Why does my APR go up with fees?

Because you repay the full loan but receive less money, which is the same as borrowing at a higher rate.

Often used together with the APR Calculator.