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APR Calculator

Estimate the approximate annual percentage rate after combining interest and fees, so you can compare borrowing offers on a more consistent basis.

  • Zero dependencies
  • Accessible form structure
  • Mobile responsive layout
  • Validation and edge-case handling

Calculator

Principal borrowed.

Nominal annual interest rate before fees.

Origination or upfront fees paid for the loan.

Loan term in months.

Results

Ready to calculate

Enter your figures and press Calculate. Results update instantly in your browser.

Frequently asked questions

APR vs APY?

APR is a borrowing-cost measure used for loans and cards. APY is commonly used for savings and shows yield including compounding.

How do fees affect APR?

Fees increase borrowing cost even if the interest rate stays the same, which is why APR can be meaningfully higher than the stated rate.

Does APR matter for credit cards?

Yes. Credit card APR helps estimate borrowing cost when you carry a balance, though daily compounding and fees can complicate the exact result.

Why does APR matter for mortgages?

Mortgage APR helps compare offers with different fee structures and rates, though it is still not a perfect forecast of your total long-term cost.

How do I compare offers?

Compare APR, payment, fees, prepayment terms, and total finance charge rather than focusing on one number alone.

Is this exact?

This calculator gives an estimate based on the figures you enter. Lenders may disclose APR differently depending on the product and regulatory method used.

What Is the APR Calculator?

APR — Annual Percentage Rate — is a standardized way to express the true yearly cost of borrowing money. Unlike a simple interest rate, APR folds in fees charged by the lender, giving you a single number that reflects what you actually pay per year relative to the amount borrowed. Lenders in the US are required by the Truth in Lending Act (TILA) to disclose APR on consumer loans, making it the most consistent basis for comparing offers from different banks or credit unions. Car buyers comparing dealer financing to a credit union loan, homeowners evaluating refinance offers, and credit card holders weighing balance transfer options all benefit from understanding APR. This calculator estimates APR by combining the loan amount, stated interest rate, total fees, and loan term into a single annualized figure.

How to Use This Calculator

  1. Loan amount — Enter the principal you are borrowing in dollars. For a mortgage, use the loan amount after your down payment, not the home purchase price.
  2. Interest rate — Enter the nominal annual interest rate the lender quoted you, as a percentage. This is the rate before fees are factored in.
  3. Fees — Enter all upfront origination or financing fees in dollars. Common examples include origination fees, points, and broker fees. Exclude appraisal and title costs, which are typically not included in APR.
  4. Loan term — Enter the repayment period in months. A 30-year mortgage is 360 months; a 5-year auto loan is 60 months.

Understanding Your Results

The calculator returns your approximate APR, monthly payment, total interest paid, total finance charge (interest plus fees), and total amount paid over the life of the loan. The APR will always be at or above the stated interest rate — the gap between the two widens as fees increase or the loan term shortens. A $300 fee on a 36-month loan raises the effective cost more than the same $300 fee spread over a 360-month mortgage, because there are fewer months to dilute the fee's impact. When comparing two loan offers, the one with the lower APR is generally the better deal, assuming you hold the loan to full term. If you plan to pay it off early, also look at total fees charged, since upfront fees hit harder over a shorter repayment period.

Example Calculation

A borrower takes a $25,000 auto loan at 6.5% interest for 60 months with a $400 origination fee. The stated monthly payment is about $487. Total interest over 60 months is roughly $4,220. Adding the $400 fee gives a total finance charge of $4,620. The APR works out to approximately 6.9% — about 0.4 percentage points higher than the stated rate. A competing lender offers 6.8% with no fees. That loan's APR is 6.8% — actually worse than the first offer despite the higher stated rate, because the first offer's APR of 6.9% is only marginally higher and the first lender may offer better service terms. Comparing APRs side by side makes this kind of nuanced analysis straightforward.

Frequently Asked Questions

What is the difference between APR and the interest rate on a loan?

The interest rate is the cost of borrowing the principal only, expressed as a yearly percentage. APR includes the interest rate plus most fees — origination fees, broker fees, and certain closing costs — spread over the loan term. APR is always equal to or higher than the stated rate. Comparing APRs across lenders gives you a more apples-to-apples view of total borrowing cost than comparing interest rates alone.

Why is my mortgage APR higher than the interest rate I was quoted?

Mortgage APR folds in origination fees, discount points, mortgage broker fees, and certain closing costs alongside the interest rate. On a $350,000 mortgage with $5,000 in fees, those fees meaningfully raise the effective annual cost even though your monthly payment is calculated only on the stated rate. The larger the fee load relative to the loan amount, the bigger the gap between rate and APR.

Does APR matter if I plan to pay off the loan early?

Yes, but in a different way. APR spreads fees across the full loan term, so if you pay off early, the effective cost is higher than the disclosed APR because you incurred those fees over fewer months. A loan with a low rate but high fees may look good by APR over 30 years but be expensive if paid off in 5. In that scenario, comparing total fees plus interest paid at your actual payoff date gives a clearer picture.

How does APR apply to credit cards?

Credit card APR represents the annual interest rate charged on balances you carry month to month. Most cards use daily periodic rate compounding, so the actual effective rate is slightly higher than the stated APR. If you pay your full balance every month, APR is irrelevant since no interest accrues. APR matters most when you carry a revolving balance — even a few percentage points difference compounds significantly over months.

What fees are typically excluded from APR calculations?

APR typically excludes certain third-party closing costs such as title insurance, appraisal fees, home inspection costs, and prepaid property taxes or homeowner's insurance. The exact inclusion rules are set by Regulation Z for US mortgages, and lenders may handle borderline items differently, which is one reason APR disclosures can vary slightly between lenders for similar loans.

Related: Loan Calculator · Car Payment Calculator · Closing Costs Calculator