What does the APR Calculator include that the interest rate doesn’t?

The APR Calculator includes eligible fees and finance charges, annualizing the true borrowing cost beyond the base interest rate.

How should I enter fees in the APR Calculator?

Enter upfront fees in dollars and choose whether to finance them into the loan or pay at closing for accurate APR results.

Does the APR Calculator work for biweekly payments?

Yes. Select 26 payments per year to model biweekly schedules and the calculator will annualize the APR accordingly.

Can the APR Calculator handle a 0% interest loan with fees?

Yes. Even with 0% interest, fees raise the APR. Enter the fees and the tool will solve the annualized rate.

Is the APR from the APR Calculator the same as the effective annual rate?

The calculator shows both: nominal APR (annualized) and the effective annual rate, which accounts for compounding.

Should I finance fees or pay them upfront in the APR Calculator?

Financing raises your payment but preserves cash. Paying upfront reduces net proceeds, which can increase the APR. Compare both.

Can I compare two offers using the APR Calculator?

Yes. Run the APR Calculator for each offer with its rate, fees, and term to compare the true annual cost.

What term should I use in the APR Calculator?

Enter the full repayment term in years; the calculator multiplies by your payment frequency to determine total payments.

Why does the APR Calculator show a higher APR than my rate?

Because APR includes eligible fees and the timing of cash flows, it’s usually higher than the stated interest rate.

Does the APR Calculator account for prepayment?

No. It assumes full term amortization. If you plan to prepay, the real cost may differ from the calculated APR.

APR Calculator: Find True Annual Loan Cost

Use our APR Calculator to uncover the true annual cost of your loan by blending interest with eligible fees. Whether you’re comparing credit offers, auto loans, personal loans, or mortgages, APR helps you make apples-to-apples comparisons so you can choose the best deal with confidence.

What is APR and why it matters

APR (Annual Percentage Rate) expresses the yearly cost of borrowing as a percentage, including the base interest rate plus certain finance charges and fees. Unlike the nominal interest rate, APR accounts for upfront costs such as origination or discount points, revealing how those fees affect the overall price of your loan. Because APR is standardized and annualized, it’s the most reliable single number for comparing loan offers with different rates, fees, and payment schedules.

How the APR Calculator works

Our APR Calculator estimates your periodic payment based on the interest rate, term, and whether fees are added to the loan or paid upfront. Then it solves for the internal rate of return of the cash flows and annualizes that periodic rate to present your APR. This approach mirrors how lenders evaluate the cost of credit: you receive net proceeds on day one and repay a stream of payments over time.

Inputs you’ll need

Loan amount: The principal you borrow.
Annual interest rate: The stated (nominal) rate, not including fees.
Loan term (years): The time over which you repay the loan.
Payments per year: Choose 12 for monthly, 26 for biweekly, or 52 for weekly payments.
Upfront fees: Origination, points, or other eligible financing charges.
Finance the fees: Decide whether those fees are rolled into the loan or paid at closing.

Interpreting the results

Your results include the periodic payment, the nominal APR (annualized periodic rate), and the effective annual rate (EAR), which compounds the periodic APR across the year. You’ll also see totals such as total of payments and total interest/finance charges. If fees are paid upfront, your net proceeds decrease, which typically raises APR compared to the stated rate. If fees are financed, your payment increases and APR may also rise, but your upfront cash need is lower.

APR vs. interest rate

The interest rate is the base cost of borrowing without fees. APR includes eligible fees and standardizes the cost across different loan structures. Two loans might share the same interest rate, but the one with higher fees will almost always show a higher APR. Conversely, a slightly higher interest rate with minimal fees can yield a lower APR over the life of the loan. That’s why comparing offers by APR is so powerful.

When APR shines (and when to look deeper)

Best for comparing similar fixed-rate installment loans with standard payment schedules.
Useful for judging whether points or origination fees are worth paying upfront.
Great for aligning choices when one lender quotes a low rate with high fees and another quotes a higher rate with minimal fees.

However, APR may not capture every possible charge or reflect scenarios with variable rates, prepayments, or irregular payment schedules. If you expect to prepay early, the real cost can diverge from a simple APR comparison. In those cases, consider both APR and your anticipated holding period.

Tips for getting a lower APR

Improve your credit profile to qualify for better pricing.
Shop multiple lenders and compare the all-in APR, not just the interest rate.
Weigh the breakeven on points and fees against how long you’ll keep the loan.
Choose a shorter term if affordable; it reduces total interest paid.
Avoid unnecessary add-ons that inflate finance charges.

How to use the APR Calculator

Enter your loan amount, interest rate, and term. Add any fees and choose whether to finance them. Select your payment frequency, then calculate. You’ll instantly see the payment and APR so you can evaluate the trade-offs between upfront costs and long-term expense. Repeat with different scenarios to find the sweet spot for your budget and goals.

Bottom line: APR distills the total borrowing cost into a single annualized number. With this APR Calculator, you can quickly compare offers, understand the impact of fees, and make a confident, data-driven decision.

APR Calculator