General APR Calculator
View Amortization Table
| # | Payment | Principal | Interest | Balance |
|---|
What is an APR calculator?
An APR Calculator works out the annual percentage rate (APR) of a loan: the yearly cost of borrowing once fees are counted along with interest. Two loans with the same interest rate can have different APRs if one charges more in fees, so APR is the fairer way to compare offers for a mortgage, car loan or personal loan.
How to use it
- Enter the loan amount, the term in years and months and the interest rate.
- Choose how interest is compounded and how often you pay.
- Enter loaned fees (fees added to the loan balance) and upfront fees (fees you pay in cash).
- Click Calculate to see the real APR, the payment, total interest, total fees and an amortization table.
How APR is calculated
The calculator first finds the payment on the amount you actually borrow, including any financed fees:
M = P × r(1 + r)^n ÷ ((1 + r)^n − 1)
It then finds the rate at which those same payments would repay only the money you actually received (the loan amount minus any upfront fees). That rate, expressed per year, is the APR. Because there is no simple formula for it, the calculator finds it by trial and error.
Example
You borrow $10,000 at 6% for 3 years, and the lender adds a $300 fee to the loan. You repay $10,300, so the payment is about $313.35 a month. But you only received $10,000, and $313.35 a month for 36 months repays $10,000 at about 8.0%. The stated rate is 6%, but the APR is about 8.0%.
APR vs. interest rate
The interest rate is the cost of borrowing the principal. The APR adds most lender fees, such as origination fees and points, and spreads them over the loan term. In the US, lenders must disclose the APR under the Truth in Lending Act, so you can compare offers on the same basis. The shorter the loan, the more a fixed fee pushes the APR above the interest rate.
Tips
- Compare loans with the same term by APR; compare different terms by total cost as well.
- Ask which fees are included in the quoted APR.
- If you might repay a loan early, a low-fee loan can beat one with a slightly lower rate but high fees.
Frequently Asked Questions
An APR Calculator estimates the Annual Percentage Rate of a loan by combining the interest rate with eligible lender fees. It helps borrowers understand the actual yearly cost of borrowing money.
The interest rate only reflects the cost of borrowing the loan principal, while APR includes both the interest rate and certain loan fees. This makes APR a more accurate measure when comparing loan offers.
APR includes many lender-required financing costs, but some expenses, such as property appraisals, title insurance, or optional services, may not be included depending on the type of loan.
APR measures the annual cost of borrowing money, while APY (Annual Percentage Yield) measures the annual return on savings or investments by including compound interest. APR is commonly used for loans, whereas APY is used for deposit accounts.
Because APR includes fees. A $10,000, 3-year loan at 6% with a $300 fee has an APR of about 8.0%. With no fees, the APR and the interest rate are the same.
Disclaimer: This calculator gives estimates for general information only. It is not financial, tax or legal advice. Results depend on the numbers you enter and on simplified assumptions, so your actual figures may differ. Check important decisions with a qualified professional or the official source.
Related Calculators
To compare loan offers in more detail, try these calculators.