APR Calculator
Enter your loan details and upfront fees to calculate the true Annual Percentage Rate. APR is the single best number for comparing loan offers side by side.
Why APR matters more than interest rate
Two loans can have the same interest rate but very different costs. A loan with a 5% rate and a $1,000 origination fee is more expensive than one with a 5.3% rate and no fees — if the term is short enough. APR accounts for both, giving you one number to compare.
The APR calculation finds the rate at which the present value of all your payments equals the amount you actually receive (loan amount minus upfront fees). This is why APR is always higher than the nominal rate when fees exist.
Examples
No fees
$10,000 · 5% · 60 months · $0 fees
5.000% APR
APR = nominal rate
With fees
$10,000 · 5% · 60 months · $300 fees
5.671% APR
fees add 0.67 points
Short term amplifies fees
$10,000 · 5% · 12 months · $300 fees
8.48% APR
same fees, bigger impact
Frequently asked questions
What is APR?
APR stands for Annual Percentage Rate. It is the true annual cost of a loan, expressed as a percentage, including both the interest rate and any mandatory upfront fees. APR gives you a single number to compare different loan offers.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR is the interest rate plus fees, annualized. A loan advertised at 5% interest with a $500 origination fee on a $10,000 loan will have an APR higher than 5% — the exact amount depends on the loan term.
Why is APR always higher than the interest rate?
Because APR includes fees that the interest rate does not. The only time APR equals the interest rate is when there are zero fees. The longer the loan term, the smaller the effect of upfront fees on the APR.
How do I use APR to compare loans?
Compare the APR of two loans with the same term. A lower APR means less total cost. For loans with different terms, use the total cost (monthly payment × months + fees) for a fair comparison, because a shorter loan with a higher APR may still be cheaper overall.
What fees are included in APR?
APR typically includes origination fees, broker fees, and certain closing costs. It does NOT include optional fees (like late payment fees), insurance, or taxes. Always check the loan disclosure for the full fee list.
Disclaimer: For informational purposes only. APR calculations are estimates based on the values you enter. Actual APR may vary depending on your lender's fee structure and local regulations. Always review the full loan disclosure before signing.