Under the U.S. Truth in Lending Act lenders must disclose the APR so borrowers can compare offers. A loan with a lower interest rate but high fees can have a higher APR – and the APR assumes you keep the loan for the full term.
How to use the APR Calculator
- Loan amount
- Interest rate
- Loan term
- Compounding frequency
- Payment frequency
- Fees financed into the loan
- Fees paid upfront
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the loan amount, interest rate, term, compounding, payment frequency, fees added to the loan and fees paid upfront.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Loan amount | Amount in your currency |
| Interest rate | In % |
| Loan term | Units: years, months |
| Compounding frequency | Choose one: Yearly, Semi-annually, Quarterly, Monthly … |
| Payment frequency | Choose one: Monthly, Semi-monthly, Bi-weekly, Weekly … |
| Fees financed into the loan | Amount in your currency |
| Fees paid upfront | Amount in your currency |
What each result means
- Number of payments = round([Loan term]×[Payment frequency])
- Payment per period = pmt([Rate per payment], [Number of payments], [Loan amount] + [Fees financed into the loan])
- Total interest = [Payment per period]×[Number of payments] – [Loan amount] – [Fees financed into the loan]
- Total fees = [Fees financed into the loan] + [Fees paid upfront]
- Effective annual rate (EAR) of the interest rate = ((1 + [Rate per payment])^[Payment frequency] – 1)×100
- Real APR (with fees) = rate([Number of payments], 0 – [Payment per period], [Loan amount] – [Fees paid upfront])×[Payment frequency]×100
- Effective APR = ((1 + rate([Number of payments], 0 – [Payment per period], [Loan amount] – [Fees paid upfront]))^[Payment frequency] – 1)×100
Example values
How the main result changes when Loan amount changes and everything else stays at the example values above:
| Loan amount | Payment per period |
|---|---|
| 50,000 | 571.76 |
| 75,000 | 849.31 |
| 100,000 | 1,126.86 |
| 125,000 | 1,404.41 |
| 150,000 | 1,681.96 |
| 200,000 | 2,237.06 |
Formula
Payment = pmt(rate per period, n, loan + financed fees)APR = periodic rate i that solves (loan − upfront fees) = payment × (1 − (1 + i)^−n) ÷ i, × payments per yearEffective APR = (1 + APR ÷ p)^p − 1Worked example
Inputs — Loan amount: $100,000; Interest rate: 6 %; Loan term: 10 years; Compounding frequency: Monthly; Payment frequency: Monthly; Fees financed into the loan: $1,500; Fees paid upfront: $500.
Results — Number of payments = 120; Payment per period = $1,126.86; Total interest = $33,722.97; Total fees = $2,000.00; Effective annual rate (EAR) of the interest rate = 6.168 %; Real APR (with fees) = 6.442 %; Effective APR = 6.635 %.
Frequently asked questions
What is the difference between APR and interest rate?
APR includes fees; the interest rate doesn't.
What fees are included in APR?
Origination fees, points, mortgage broker fees and some closing costs.
Is a lower APR always better?
Usually, if you keep the loan for its full term.
What formula does the APR Calculator use?
Payment = pmt(rate per period, n, loan + financed fees).