APR Calculator
Find the true annual percentage rate of a loan after accounting for fees and points.
APR Results
What is an APR Calculator?
The Annual Percentage Rate (APR) represents the true yearly cost of borrowing, including interest plus upfront fees and points. Lenders are required to disclose APR so borrowers can compare loans on equal footing.
This calculator estimates APR by finding the interest rate that makes the present value of your monthly payments equal to the net loan proceeds (amount borrowed minus fees). It also shows your monthly payment and total loan cost.
How to Use
- Enter the loan amount you are borrowing.
- Input the nominal interest rate quoted by the lender.
- Specify the loan term in years.
- Enter any upfront fees, points, or closing costs.
- Click Calculate to see the estimated APR, monthly payment, and total cost.
Frequently Asked Questions
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR includes the interest rate plus additional fees, giving a more complete picture of the loan's true cost.
Why does APR matter?
APR allows you to compare loans with different fee structures. A loan with a lower interest rate but high fees may have a higher APR than a loan with a slightly higher rate and no fees.
How accurate is this estimate?
This calculator provides a close approximation using an iterative method. Exact APR calculations may vary slightly depending on compounding conventions and fee timing.
Does APR include ongoing fees?
This version focuses on upfront fees. Ongoing fees like annual charges are typically not included in standard APR unless specified by the lender.