APR calculator
The real yearly cost of a loan once fees are included.
About this calculator
This APR calculator shows the real yearly cost of a loan once fees are included. Enter the loan amount, the interest rate, the term and any fees or points.
Use it to compare loan offers that mix different rates and fees.
How it works
APR is the rate at which the money you actually receive equals the payments you make. Fees paid upfront mean you receive less, and fees added to the loan raise the payment, so either way the APR rises above the interest rate.
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Worked example
- Loan amount: $200,000
- Interest rate: 6.5% a year
- Term: 30 years
- Fees and points: $4,000
- Fees are: Paid upfront
APR: 6.695% (a year, including fees)
Common questions
What is the difference between APR and the interest rate?
The interest rate is the cost of borrowing the money. The APR adds most fees, so it's usually higher and gives a fairer comparison between loans.
What fees are included in APR?
Usually lender fees such as origination charges and points. Some costs, like appraisals or title insurance on a mortgage, may not be. Check each lender's official APR.
Is a lower APR always better?
For loans of the same length, usually. But if you will repay early, upfront fees matter more, since they are spread over fewer years.
Sources and further reading
The story behind it
Where the idea came from: The US Truth in Lending Act of 1968 required lenders to state the annual percentage rate, so borrowers could compare loans fairly.
Before the law, lenders quoted costs in many confusing ways. A single yearly figure that includes fees made comparison possible, and many countries now require one, such as the TAEG in France and the TAE in Spain under EU rules.
Why you can trust this calculator
- It runs in your browser. Nothing you type into it is sent anywhere.
- The method is explained on this page, so you can check it yourself.
- Free to use, with no sign-up.
- Results are estimates, not financial advice.
- Spotted a mistake? Tell us and we'll look into it.
After 15 years as a mathematics educator, I built CalculStore to give students, teachers, professionals and anyone working with numbers simple, reliable tools.
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