APR calculator
Enter the loan amount, the fees paid up front, the interest rate and the term. The APR shows what the loan really costs once fees are counted, so you can compare it with other offers.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the loan amount, the up-front fees, the yearly interest rate and the term.
- Read the APR and compare it with the interest rate.
- Payment = P × i ÷ (1 − (1 + i)^−n), with i = rate ÷ 12 and n months
- Amount financed = loan − fees
- APR = 12 × the monthly rate i that solves payment × (1 − (1 + i)^−n) ÷ i = amount financed
- Finance charge = payments − amount financed
Worked example
You borrow 1,000 for one month at 12% a year with a fee of 10. The payment is 1,010 and you receive 990. Then 990 = 1,010 ÷ (1 + i) gives i = 2.0202% a month, so the APR is 24.24%, twice the stated rate, because the fee is large relative to a one-month loan.
A 200,000 loan at 6% for 30 years with 4,000 in fees has a payment of 1,199.10 and an APR of 6.189%.
Limits
- Assumes equal monthly payments paid at the end of each month and fees paid at the start.
- Variable rates, balloon payments and mortgage insurance are not modelled.
Frequently asked questions
What is APR?
The annual percentage rate is the yearly cost of a loan including certain fees, not just the interest. Because fees reduce the money you actually receive, the APR is higher than the interest rate whenever there are up-front fees.
How is APR calculated here?
The monthly payment is computed from the loan amount and the rate. The amount financed is the loan minus the up-front fees. The APR is 12 times the monthly rate i that makes the payments, discounted at i, add up to the amount financed. The calculator solves for i with Newton’s method.
Is this the legal APR for my loan?
It follows the US Regulation Z idea of an actuarial APR on equal monthly payments. Real disclosures also treat some charges differently, use exact payment dates and round to the nearest eighth of a percent. Use the figure on your loan estimate for the official number.
Which fees should I enter?
Fees that you pay at closing and that the lender counts as a finance charge, such as origination fees and discount points. Costs like an appraisal or title insurance are often excluded from the legal APR.