APR Calculator
Find the true yearly cost of a loan once its fees are included. Enter the interest rate and the upfront fees to see the APR, the monthly payment and how much the loan costs in total.
This calculator assumes a fixed-rate loan repaid in equal monthly payments, with interest applied monthly. It counts every fee you enter as a finance charge, and for an early payoff it assumes no prepayment penalty and no refund of fees. Results are estimates, and your lender's APR may differ slightly. See our terms of use.
How to use this calculator
Enter four numbers from your loan offer. The results update as you type.
- Loan amount: what you're borrowing, before any fees.
- Interest rate: the rate your payment is based on, not the APR, which the calculator works out.
- Loan term: the number of monthly payments, such as 60 for a five-year car loan or 360 for a 30-year mortgage.
- Loan fees: origination fees, discount points and other charges you must pay to get the loan.
The calculator assumes you pay the fees upfront or that they're taken out of the money you receive. If they're added to your balance instead, check Fees are added to the loan under More options. There you can also enter when you expect to repay, to see what the fees cost if you pay off early.
Total interest and fees is the loan's finance charge, its cost in dollars. Total of monthly payments adds up every payment over the term. Fees you pay upfront aren't part of it.
How APR is calculated
The APR answers one question: if the fees were turned into interest, what would the rate be? The calculator works it out in three steps.
- Monthly payment. It comes from the standard loan formula:
M = P × r(1 + r)n ÷ [(1 + r)n − 1]
Here P is the amount you owe, r is the interest rate ÷ 12 and n is the number of payments. - Amount financed. This is the money you actually get to use: the loan amount minus any fees paid upfront or withheld. If the fees are added to the loan, it's the loan amount before fees.
- APR. It's the yearly rate at which your payments are worth exactly the amount financed today:
Amount financed = M × [1 − (1 + i)−n] ÷ i, and APR = 12 × i
There's no direct formula for i, so the calculator narrows it down by trial and error to well within 0.001 percentage point. This is the actuarial method, one of two methods allowed by Regulation Z, the rule that carries out the federal Truth in Lending Act.
Example: the loan already loaded is $20,000 at 8% for 60 months with $800 in fees. The payment is $405.53 a month, and the amount financed is $20,000 − $800 = $19,200. The rate that makes 60 payments of $405.53 worth exactly $19,200 is 9.74%, so the fees add 1.74 percentage points. Your payments total $24,331.67, and interest and fees come to $5,131.67.
If the $800 is added to the loan instead, you'd owe $20,800, pay $421.75 a month and have an APR of 9.67%.
What the APR includes, and what it leaves out
For most consumer car loans, personal loans and other installment loans, the federal Truth in Lending Act requires the lender to show you the APR, the finance charge, the amount financed and the total of payments before you sign. Regulation Z defines the APR as "a measure of the cost of credit, expressed as a yearly rate."
The finance charge, and so the APR, generally includes:
- Interest
- Points, origination charges, loan fees and mortgage broker fees
- Service and transaction charges
- Insurance that protects the lender if you don't repay, such as mortgage insurance
- Appraisal and credit report fees, on loans not secured by real estate
It generally leaves out:
- Application fees that every applicant pays, approved or not
- Late fees and other charges for missed payments or default
- Costs you'd pay in a cash purchase too, such as sales tax and registration on a car
- On loans secured by real estate, bona fide and reasonable fees for title searches and title insurance, surveys, document preparation, notaries, credit reports, appraisals and inspections, plus escrow deposits for taxes and insurance
So a mortgage APR includes your points and lender fees but not all of your closing costs. On a Loan Estimate, the APR is on page 3, under "Comparisons."
APR vs. interest rate vs. APY
- Interest rate: the yearly cost of the money itself, without fees. Your payment is calculated from it.
- APR: the interest rate plus points and other charges you pay to get the loan, as a yearly rate. Use it to compare loans.
- APY (annual percentage yield): used for savings accounts and CDs. It shows a year's interest including compounding, the interest earned on interest.
A loan's APR doesn't include compounding: the monthly rate is just the APR ÷ 12. That matters most on credit cards, where unpaid interest is added to your balance. A 24% APR is 2% a month. If interest is added monthly, each month's interest is charged on earlier interest too, so a balance left unpaid for a year would grow by 26.82%, not 24%. Our compound interest calculator shows compounding working for you instead.
Comparing loan offers with different fees
A lower rate doesn't always mean a cheaper loan. Here are three offers for the same $20,000, 60-month loan, with fees paid upfront:
| Offer A | Offer B | Offer C | |
|---|---|---|---|
| Interest rate | 8.00% | 9.00% | 8.50% |
| Fees | $800 | $0 | $200 |
| Monthly payment | $405.53 | $415.17 | $410.33 |
| APR | 9.74% | 9.00% | 8.93% |
| Interest and fees over 5 years | $5,131.67 | $4,910.03 | $4,819.84 |
| Effective APR if repaid after 2 years | 10.65% | 9.00% | 9.15% |
| Interest and fees over 2 years | $3,473.80 | $3,019.69 | $3,046.43 |
Offer A has the lowest rate but the highest APR, because of its $800 in fees. Offer C has the lowest APR and costs the least over five years. But if you'll pay the loan off after two years, Offer B, with no fees, comes out ahead.
- Compare the same amount and term. The same fee looks smaller on a longer loan. On our $20,000 example at 8%, $800 in fees adds 2.80 percentage points over 36 months but only 1.29 over 84 months.
- Compare APRs with APRs, not one lender's APR with another's interest rate.
- Check the dollars too, not just the yearly rate.
- For a mortgage, compare Loan Estimates. Lenders must send one within three business days of your application, on a standard form that makes offers easy to line up.
Why APR understates the cost if you repay early
The APR assumes you keep the loan for the full term, so the fees are spread over every payment. Repay early or refinance, and you've paid the same fees over less time, so your real yearly cost is higher. Here's the example loan:
| Paid off after | Effective APR | Interest and fees paid |
|---|---|---|
| 1 year | 12.62% | $2,277.53 |
| 2 years | 10.65% | $3,473.80 |
| 3 years | 10.05% | $4,365.45 |
| 4 years | 9.81% | $4,927.20 |
| 5 years (full term) | 9.74% | $5,131.67 |
Paying early still saves interest in dollars, but the sooner you repay, the more the fees weigh. That can change which offer is best.
This matters most for mortgages. The CFPB notes that borrowers keep a mortgage for about five years on average before moving or refinancing. A $300,000, 30-year mortgage at 6.5% with $6,000 in points and lender fees has an APR of 6.70%, but paid off after five years, its effective APR is 6.99%. The "In 5 Years" line on the Loan Estimate helps here: it shows what you'd pay over the first five years. Our refinance calculator shows how long a refinance takes to earn back its closing costs.
Credit card APRs
A credit card's APR is simply its yearly interest rate. Fees such as an annual fee or a balance transfer fee aren't built into it. The same goes for a home equity line of credit, so be careful comparing either one's APR with an installment loan's, which includes fees.
Most cards have several APRs:
- Purchase APR: the rate on purchases. On most cards, you avoid it by paying your full balance by the due date each month.
- Balance transfer APR: for balances moved from another card, often with a transfer fee.
- Cash advance APR: for cash you take out with the card. Grace periods typically cover only purchases, so interest on a cash advance generally starts right away.
- Introductory APR: a temporary low rate. Under federal rules, a promotional rate generally must last at least six months.
- Penalty APR: a higher rate for paying late. It generally can't apply to your existing balance unless you're more than 60 days late, and if you then make six on-time minimum payments in a row, the issuer must lower the rate on that balance again.
Many card APRs are variable, moving with an index such as the prime rate, and some issuers charge interest daily at the APR ÷ 365 or 360. See what a balance really costs with our credit card payoff calculator, or check whether a balance transfer is worth the fee.
Frequently asked questions
Should I pay the fees upfront or add them to the loan?
Adding the fees to the loan means you borrow them too, at the loan's rate. In our example, rolling in the $800 raises the payment by $16.22 and costs $173.27 more over five years. The APR is slightly lower, 9.67% instead of 9.74%, because that extra $800 is borrowed at just 8%. If you have the cash to spare, paying upfront costs less in dollars.
Can a 0% loan have an APR above 0%?
Yes, if it has fees. A $20,000 loan at 0% for 60 months with $800 in fees has an APR of 1.62%.
Why is my lender's APR different from this calculator's?
Lenders follow detailed rules about which fees count, and their figure can reflect the date of your first payment, rounding, prepaid interest or mortgage insurance. Under Regulation Z, the APR on a loan with regular payments is generally considered accurate within 1/8 of a percentage point. If the gap is bigger, check that you entered the same fees, and the interest rate rather than the APR.
Can my APR change?
Not on a fixed-rate loan. On a variable-rate loan, a credit card or an adjustable-rate mortgage, it can change with the market. An adjustable-rate mortgage's APR also doesn't reflect the highest rate the loan could reach, so check the rate caps too.
What is a good APR?
It depends on the type of loan, the term, your credit and market rates at the time. The best test is to ask several lenders to quote the same amount and term, then compare their APRs here.
Last reviewed: October 2026