APR Calculator
Free APR calculator to find the true annual cost of a loan including fees and closing costs. Compare APR vs interest rate and see which loan offer actually costs less.
Fee Impact Breakdown
How This Is Calculated
Effective APR is the rate where the amount you actually received equals the present value of your payment stream. Payments are computed on the full loan amount; deducted fees mean you received less, which raises the APR above the stated rate.
Everything behind the APR Calculator
Formulas, reference charts, and detailed answers — expand any section you need.
Loan APR Calculator: Comparing Two Offers
| Offer | Rate | Fees | Effective APR | Total Cost |
|---|---|---|---|---|
| Offer A | 6.8% | $4,000 | 7.6% | Higher |
| Offer B | 7.1% | $500 | 7.2% | Lower |
Illustrative 30-year mortgage comparison; run your exact quotes in the calculator.
APR Calculator: The True Cost of Your Loan
This APR calculator converts a loan's stated interest rate and its fees into the effective APR, the annualized true cost of borrowing. Enter the loan amount, rate, term, and fees, and the APR calculator shows the effective APR next to the stated rate, the gap between them in dollars, and the real monthly payment math. Fees deducted from proceeds are handled correctly: you repay the full amount while receiving less, which is exactly what raises the APR above the rate.
Example: $20,000 at 9% for 5 years with a $1,000 origination fee has an effective APR of about 11.1%, not 9%.
APR vs Interest Rate: What Is the Difference?
The interest rate prices only the borrowed money; APR prices the borrowed money plus the mandatory fees, annualized over the term. Two offers can invert on these numbers: a 6.8% loan with $4,000 in fees often carries a higher APR than a 7.1% loan with $500 in fees. APR vs interest rate is the comparison that decides which offer actually costs less, and the calculator displays both with the gap quantified.
How Is APR Calculated?
APR is calculated by finding the rate that makes the amount you actually received equal to the present value of all the payments you'll make. Payments are computed on the full loan amount, but if fees were deducted, you received less than that amount, so the effective rate on your real proceeds is higher than the stated rate. The APR calculator solves this automatically and shows the method with your numbers in the trust section.
APR Calculator for Short-Term Loans: The Fee Trap
An APR calculator matters most on short terms, because fees spread across fewer payments amplify the APR dramatically. A $500 fee on a $10,000 loan adds about 1% to the APR over 10 years, but over 12 months it adds roughly 9 points. This is the math behind expensive short-term lending, and the calculator flags when a term is short enough that fees dominate the true cost.