APR Calculator
Uncover the true cost of a loan — including fees — as one annual percentage rate.
How to use
- Enter the loan amount, any fees or points, the quoted interest rate and the loan term.
- Click Calculate.
- Compare the nominal rate with the true APR that includes your upfront costs.
Estimates only — not financial advice. Verify important decisions with a qualified professional.
What Is an APR Calculator?
An APR calculator reveals the true yearly cost of a loan by folding the interest rate and the lender's fees into a single percentage: the annual percentage rate. Two loans can advertise the same interest rate yet cost very different amounts, because one carries origination fees, points, or closing costs that the other does not. The interest rate alone hides those charges; the APR exposes them, which is why US law requires lenders to disclose it.
Fees are easy to underestimate because they are often paid once, upfront, or rolled into the loan balance where they quietly accrue interest themselves. A loan with a slightly lower rate but heavy fees can easily cost more than a loan with a higher rate and no fees — especially if you repay or refinance within a few years, spreading those upfront fees over fewer payments. Converting everything to one APR figure lets you compare offers on equal footing.
How to Use the APR Calculator
- Enter the loan amount you are borrowing.
- Enter the total fees and points you will pay for the loan, in dollars (1 point equals 1% of the loan amount).
- Enter the loan's stated interest rate and the term in years.
- Click Calculate to see the APR — the effective annual cost of the loan including fees.
APR vs. Interest Rate: What Is the Difference?
The interest rate determines your monthly payment and is applied to the balance each month. The APR starts from that same rate, then adds the effect of prepaid fees by treating them as part of the cost of borrowing — mathematically, it is the rate that makes the actual amount you receive, after fees, consistent with the payments you make. For mortgages, APR also typically includes mortgage insurance and some closing costs; for personal and auto loans it includes origination fees. The wider the gap between a loan's rate and its APR, the more the fees are costing you.
Tips for Comparing Loan Offers
- Always compare APR to APR, never APR to a bare interest rate — lenders know the rate looks smaller.
- Ask for a full fee breakdown. Vague "closing costs" can hide charges you may be able to negotiate or decline.
- If you expect to move, sell, or refinance soon, weight upfront fees more heavily — you will not hold the loan long enough to recover them through a lower rate.
Why is the APR higher than the interest rate?
Because the APR includes fees on top of interest. If a loan had zero fees, its APR and interest rate would be nearly identical. The size of the gap tells you at a glance how significant the fees are relative to the loan.
What fees are included in APR?
Typically origination fees, discount points, mortgage broker fees, and many closing costs on mortgages. Some charges — such as appraisal or title fees paid to third parties — may be treated differently depending on the loan type. Your lender's Loan Estimate spells out exactly which fees apply to your offer.
Does a lower APR always mean a cheaper loan?
For the same term and the same time holding the loan, yes, APR is the best single comparison number. But if you repay early, high upfront fees hurt more than APR suggests, because APR spreads fees across the full term. Consider both the APR and the total fees in dollars.
Is APR the same for credit cards?
Not quite. Credit card APR is usually just the interest rate applied to balances — most card fees are not folded in — and card rates are typically variable. This calculator is designed for installment loans such as mortgages, auto loans, and personal loans.