APR Calculator
Calculate the Annual Percentage Rate (APR) for a loan, factoring in fees and interest to reveal the true cost of borrowing.
Results
What is it?
The Annual Percentage Rate (APR) is the true annual cost of a loan expressed as a percentage. Unlike the nominal interest rate, APR includes origination fees, closing costs, and other charges — giving you a single number to compare different loan offers on equal footing.
How to use
1. Enter the loan principal (the amount you are borrowing). 2. Enter the total upfront fees charged by the lender. 3. Enter the stated (nominal) annual interest rate. 4. Enter the loan term in years. The calculator will show the effective APR and your monthly payment.
Example scenario
You borrow $25,000 at a 6.5% nominal rate for 5 years with $1,000 in origination fees. Your monthly payment is about $489. Because the fees reduce the amount you actually receive, the APR comes out higher than 6.5%, revealing the true cost of the loan.
Pro tip
When comparing loan offers, always compare APRs rather than nominal rates. A loan with a lower nominal rate but high fees can be more expensive than one with a slightly higher rate and no fees.