APR Calculator
Compute the true annual percentage rate (APR) of a loan, taking into account any upfront fees. Two loans with the same interest rate can have very different APRs if one charges large origination or closing fees — APR is the number that reflects the actual cost of borrowing.
Enter loan and fee details
Enter loan details and press Calculate APR.
How APR is computed
APR is the interest rate that makes the present value of all payments equal to the net amount actually borrowed — that is, the loan amount minus upfront fees. Since the fee reduces the money you receive without reducing the repayments, the effective cost is higher than the stated rate.
net = amount − fees
net = M · [ 1 − (1 + r)^-n ] / r
Solve numerically for the monthly rate r, then annualise.
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Frequently asked questions
Interest rate only covers the cost of the loan amount. APR adds the upfront fees, so it reflects the true annual cost. This is why regulators require lenders to disclose APR — it lets borrowers compare loans with different fee structures on equal footing.
APR is the best single number for comparing loans, but it does not tell the whole story. Also consider the term length (a longer term with lower APR might cost more in total), any prepayment penalties, variable-rate clauses and whether the lender offers flexibility you value (such as overpayment without charge).