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APR Calculator
Calculate the true Annual Percentage Rate on any loan, including fees. Compare loan offers on an apples-to-apples basis. We're building this calculator now — check back soon.
Calculate the true Annual Percentage Rate on any loan, including fees. Compare loan offers on an apples-to-apples basis. We're building this calculator now — check back soon.
The Annual Percentage Rate (APR) is the true annual cost of borrowing money, expressed as a percentage. Unlike a simple interest rate, APR includes fees, discount points, and other charges — making it the standardized metric lenders are legally required to disclose under the Truth in Lending Act (TILA). This calculator converts a nominal interest rate plus associated fees into the equivalent APR so you can make apples-to-apples comparisons between loan offers with different fee structures.
A loan with a 6.5% rate and $3,000 in origination fees will have a higher APR than a 6.75% loan with no fees — but which is cheaper depends on how long you keep the loan. This calculator shows you both APR and break-even point.
APR is calculated by finding the discount rate that equates the present value of all future payments to net loan proceeds (loan amount minus upfront fees):
Loan Amount − Fees = Σ [Payment / (1 + r/12)ᵗ]
This is essentially an internal rate of return (IRR) calculation. For mortgages, APR includes origination fees, discount points, and mortgage broker fees — but not title insurance, appraisal fees, or prepaids, which is why APR can still understate total upfront cost.
The interest rate determines your monthly payment; APR determines the total loan cost including fees. A loan can have a lower interest rate but higher APR if it has substantial fees. For short holding periods, the lower-fee loan often wins; for long periods, the lower-rate loan typically wins even with higher upfront fees.
APR (for borrowing) does not compound within the year. APY (for savings) accounts for within-year compounding. A savings account advertising 5% APY has an effective daily rate that equals 5% over the full year — the periodic rate is slightly lower than 5% ÷ 365.
One discount point costs 1% of the loan amount and typically reduces the interest rate by 0.25%. Points are prepaid interest included in APR. Whether buying points makes sense depends entirely on how long you keep the loan — calculate the break-even (point cost ÷ monthly savings) to decide.
Personal loan APRs in 2024 range from about 6% for excellent credit to over 36% for poor credit. The Federal Reserve reports average rates around 12–13% for 24-month personal loans. Anything below 10% is generally considered good; above 20% is expensive and suggests exploring credit improvement or secured alternatives.
No — your monthly payment is determined by your interest rate and loan term, not APR. APR includes upfront fees that don't change your payment. It's a cost-comparison tool. Use the interest rate (not APR) when calculating monthly payments.
Mortgage APR includes origination fees, points, and certain closing costs spread over the loan life. On a $400,000 mortgage, $4,000 in fees adds about 0.05–0.10% to APR. If you paid 2 discount points ($8,000), the APR difference would be more noticeable — about 0.20–0.25% on a 30-year loan.
0% promotional offers mean no interest during the promotional period — but read the fine print. Many cards will retroactively charge interest on the entire original balance if you don't pay it off completely before the period ends. Auto dealer 0% financing sometimes means forgoing a cash rebate that would have been worth more.
Once you know your APR, use the Mortgage Calculator for home loan costs, or the Auto Loan Calculator for car payments. The Debt Payoff Calculator and Credit Card Calculator help you build a strategy for paying down existing high-APR debt.