APR Calculator

APR is the true annual cost of borrowing, including interest and fees. Use this to compare loan offers and understand the real cost beyond just the interest rate.

💰 Financial Disclaimer: This calculator is for educational purposes only. Consult a qualified financial professional.

How It Works

Enter loan amount, interest rate, term, and upfront fees. The calculator uses numerical iteration to find the effective APR including all costs.

Formula

APR solves for the rate where present value of payments equals loan amount minus fees.
Net Proceeds = PMT × (1−(1+APR/12)^−n) / (APR/12)

Example

$100,000 loan, 6% rate, 30 years, $2,000 fees:
Monthly payment: $599.55. Net proceeds: $98,000.
Effective APR: 6.17%

When to Use This Calculator

Use before signing any loan to understand the full cost. Lenders must disclose APR under the Truth in Lending Act.

Common Mistakes to Avoid

Comparing loans by interest rate alone — lower rate + high fees can mean higher APR.
Ignoring loan term — APR is only comparable across loans with the same term.
Confusing APR with APY — APR is for loans; APY is for savings.

Frequently Asked Questions

Why is APR higher than the interest rate?

APR includes upfront fees spread across the loan term, making it higher than the base rate.

Good mortgage APR?

Under 7% for a 30-year fixed is generally good, depending on market conditions and credit score.

Can I compare different loan types by APR?

APR works across types but is most useful comparing similar products with the same term.

Lower APR always better?

Yes, for the same amount and term, lower APR = lower total cost.

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Last Updated: July 4, 2026