APR Calculator

Find the true annual percentage rate (APR) of a loan once upfront fees are included.

$
$

Origination, points, and other required finance charges.

%
APR
8.286%

Fees add 1.286% to the 7% interest rate.

Stated rate vs APR
0%2%4%6%8%10%Interest rate — Rate: 7%Interest rateAPR — Rate: 8.29%APR
Monthly payment
$396.02
Total interest
$3,761.44
Total finance charge (interest + fees)
$4,361.44
Total of all payments
Cash you receive: $19,400 (81.6%)Interest: $3,761 (15.8%)Fees: $600.00 (2.5%)
  • Cash you receive$19,40081.6%
  • Interest$3,76115.8%
  • Fees$600.002.5%
Show the working
  1. Payment on $20,000.00 at 7% for 60 months = $396.02
  2. You actually receive $19,400.00
  3. APR is the rate i × 12 where the 60 payments are worth exactly $19,400.00 today: 8.286%

Runs entirely in your browser. Nothing you enter is uploaded.

Formula

Payment = L · r ÷ (1 − (1 + r)^−n)Solve: cash received = Payment × (1 − (1 + i)^−n) ÷ iAPR = i × 12

How it works

The interest rate tells you what the lender charges on the balance. The APR folds in the required upfront fees as well, so it reflects what borrowing really costs per year. In the U.S., the Truth in Lending Act requires lenders to disclose it, which makes it the best single number for comparing offers.

The calculation asks: given the payments you will make, what interest rate would make them exactly repay the cash you actually get? If a $20,000 loan carries a $600 fee taken at closing, you only receive $19,400 but repay as if you borrowed $20,000 — so the effective rate is higher.

Fees matter more on short loans. A fee spread over 30 years barely moves the APR, while the same fee on a two-year loan can add a full percentage point or more. If you will pay off or refinance early, the real cost of the fees is even higher than the APR suggests.

Frequently asked questions

Which fees are included in APR?

Finance charges required to get the loan: origination fees, discount points, mortgage broker fees and some closing costs. Third-party fees like appraisals, title insurance and recording fees are usually excluded on mortgages.

Is APR the same as APY?

No. APR is a simple annual rate (monthly rate × 12) used for loans. APY includes compounding and is used for savings. A 12% APR charged monthly equals about a 12.68% APY.

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