APR Calculator
Find a loan's real APR once upfront fees are folded into the interest rate.
How to use the APR Calculator
- Enter the loan amount and the nominal interest rate.
- Enter the upfront fees charged to set up the loan.
- Enter the loan term in years.
- See the true APR that reflects both the rate and the fees.
APR is the rate at which the payments discount back to the amount received (loan − fees)
About the APR Calculator
The interest rate on a loan is only half the story; the fees are the other half, and the APR is what combines them into a single, comparable number. This calculator prices the monthly payment on your loan at the nominal rate, then solves for the rate that makes those payments equal the money you actually received — the loan minus the upfront fees. That solved rate is the effective APR, and it is always higher than the nominal rate whenever fees are involved, because you are repaying the full amount while having received less.
This is exactly why lenders are required to quote an APR: two loans with the same headline rate can cost very different amounts once one piles on arrangement fees. Comparing APRs strips that trick away and shows which offer is genuinely cheaper. A small fee on a short loan barely moves the APR; a large fee on a short term can move it sharply, because there is less time to spread the cost.
The figure here reflects fees and interest; a real lender's APR may also bundle other mandatory charges, and definitions vary slightly by country. Use it to compare like with like. For the monthly payment itself use the loan calculator, and for the savings side's equivalent, the APY calculator.
Frequently asked questions
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the money alone. APR also includes upfront fees, spread across the loan, giving the true yearly cost. When there are fees, APR is higher than the nominal rate.
Why is APR useful?
It lets you compare loans on equal terms. Two loans with the same interest rate can cost very different amounts once fees are counted, and the APR reveals which is genuinely cheaper.
Does a bigger fee always raise the APR a lot?
It depends on the term. A fee has a larger effect on a short loan, where there is less time to spread it, and a smaller effect on a long one. The calculator shows the exact impact for your figures.