APR Calculator
Find the true APR of a loan — enter the loan amount, interest rate, term and fees to see the annual percentage rate next to the nominal rate, plus the monthly payment and total cost.
Created and reviewed by Christoph Ballmer Estimate for general information only — not financial advice. The APR is computed from the loan amount, rate, term and fees you enter, using the standard method of solving for the rate that equates the payments to the amount financed; a lender’s disclosed APR may treat certain fees differently. Figures as of 07/2026, without warranty.
APR vs. interest rate (why they differ)
The interest rate is the cost of borrowing the principal. The APR (annual percentage rate) is broader — it folds the lender fees and points into a single yearly rate, so it reflects the true cost of the loan. Because it adds those upfront costs on top, the APR is almost always higher than the nominal rate, and the more fees a loan carries, the wider the gap. This calculator shows both side by side, which is exactly how federal rules require lenders to disclose them.
APR = the yearly rate that makes the payments equal the amount you actually receive after fees
For example, a $20,000 loan at a 6% rate over 5 years with $400 in fees works out to an APR of about 6.8% — the $400 pushes the true cost roughly 0.8 points above the sticker rate. A loan with a lower rate but heavy fees can end up with a higher APR than one with a higher rate and no fees.
How APR is calculated
Start with the monthly payment from the nominal rate and term. Then find the rate that discounts those payments back to the amount you actually received — the loan minus fees. Annualized, that rate is the APR. It is the fairest single number for comparing loans, as long as you keep them for the full term.
One caveat: APR assumes you hold the loan to the end. If you expect to refinance or sell early, a loan with a higher rate but lower upfront fees can cost less overall despite a higher APR — compare the total cost for your real time horizon. To size a specific loan, use the mortgage calculator or auto loan calculator; for the fees on a home purchase, the closing cost calculator.
Frequently asked questions
What is APR?
APR (annual percentage rate) is the yearly cost of a loan expressed as a percentage that includes not just the interest rate but also fees and points. Because it folds in those upfront costs, the APR is usually higher than the nominal interest rate, and it lets you compare loans on a single number. Enter your loan and fees above to see it.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal; the APR adds the lender fees and points on top, spread over the loan term. A loan can have a low rate but a higher APR if it carries big fees. That is why federal rules require lenders to show both — the calculator displays them side by side.
Is a lower APR always better?
Usually, but not always. APR assumes you keep the loan for its full term; if you will refinance or sell early, a loan with a higher rate but lower fees (lower upfront cost) can be cheaper overall, even with a higher APR. Compare the total cost for how long you actually expect to keep the loan.
How do fees affect APR?
Fees and points raise the APR without changing the interest rate, because you effectively borrow the full amount but receive less after fees, and repay based on the full balance. The more fees, the wider the gap between the rate and the APR. Enter your fees above to see how much they add.