APR Calculator
The APR is the interest rate plus the effect of the fees you pay to get the loan. Two offers with the same rate can have different APRs once fees are counted. Enter your figures to estimate the APR from your rate, amount, fees and term.
APR Calculator
How this calculator works
The APR is the rate that makes the present value of your payments equal the money you actually receive. If you borrow 20,000 and pay 500 in fees, you only receive 19,500, but you still repay the full 20,000 plus interest. The APR is the rate that makes 19,500 today equivalent to the stream of payments you will make.
This tool first computes your monthly payment at the nominal rate, then searches for the monthly rate at which the present value of those payments equals your net proceeds. It uses a bracketing and bisection method, which is a reliable way to solve that equation when there is no simple formula for the rate.
The result is a documented approximation. It assumes the fees are paid up front and that you make every payment on time for the full term. It does not include late fees, prepayment penalties or rate changes, and lenders may calculate the disclosed APR with additional conventions. Use this estimate to compare offers, not as a substitute for the lender's own disclosure.
Frequently asked questions
Why is the APR higher than the interest rate?
Because the APR spreads the upfront fees across the life of the loan as if they were extra interest. You receive less than the amount you repay, so the effective annual cost is higher than the headline rate.
Which fees are included in an APR?
Most lender origination and closing fees are included. Third-party costs such as certain appraisals or credit report fees may or may not be. The lender's official disclosure shows exactly what it counted.
Is a lower APR always the better deal?
For the same term and amount, yes — a lower APR means a lower total cost. If the terms differ, compare the total cost as well, because a longer term can lower the payment while raising total interest.
Does a zero-fee loan have an APR equal to the rate?
Yes, in this model. With no fees, your net proceeds equal the amount borrowed and the APR equals the nominal annual rate.
Can I use this for a mortgage or auto loan?
Yes, the same principle applies, though mortgages have additional fee categories and disclosure rules. Treat the result as an estimate and rely on the lender's APR disclosure for the official figure.
Check your rate with a lending partner in about two minutes. Checking does not affect your credit score.
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