APR Calculator — Find the True Cost of a Loan With Fees
The interest rate on a loan offer is not its full price. The annual percentage rate (APR) also counts origination fees, discount points, and other upfront charges, so you can compare loans on equal terms. Enter the loan amount, interest rate, term, and fees, and this free APR calculator finds the true APR, the monthly payment, the total interest, and the full cost of borrowing. It works for personal loans, car loans, mortgages, and business loans, whether the fees are paid upfront or added to the balance.
Interest rate vs APR: an example
Two $20,000 loans over 5 years both charge 8% interest. Loan A has no fees. Loan B takes a 5% origination fee ($1,000) out of the money you receive. Both have the same $405.53 monthly payment, but with loan B you only get $19,000, so its APR is about 10.2% instead of 8%. If the fee is added to the balance instead, the payment goes up and the APR still ends up above the stated rate.
How APR is calculated
The calculator finds the rate at which your monthly payments exactly repay the amount you actually receive after fees, the same actuarial method used for U.S. Truth in Lending disclosures. APY, shown next to it, is the yearly rate with monthly compounding: APY = (1 + APR ÷ 12)12 − 1. For the payment details of a specific loan, try the personal loan calculator or the auto loan calculator.
How to use APR Calculator
- Enter the amount you are borrowing.
- Enter the interest rate and the loan term in years or months.
- Add the origination fee, discount points, and any other upfront fees.
- Choose whether the fees are deducted from the loan or added to the balance.
- Compare the APR with the interest rate and review the total cost of borrowing.
Features
- True APR with fees — Includes origination fees, discount points, and flat charges such as underwriting or documentation fees.
- Upfront or financed fees — See how the APR changes when fees are taken from the loan or rolled into it.
- Full cost breakdown — Monthly payment, amount received, total interest, total cost, and APY in one place.
- Any loan type — Personal loans, auto loans, mortgages, and business loans with terms in months or years.
Frequently Asked Questions
What is the difference between interest rate and APR?
The interest rate is what the lender charges on your balance, and it sets the monthly payment. APR also spreads the loan's fees over the term, so it shows the yearly cost of borrowing. A loan with no fees has an APR equal to its interest rate; the more fees, the bigger the gap.
Which fees are included in APR?
Charges you must pay to get the loan, such as origination or processing fees, discount points, and underwriting or documentation fees, plus some closing costs and mortgage insurance on mortgages. Third-party costs such as appraisals and title insurance are often excluded on mortgages, so the lender's official disclosure is the final word.
Is APR the same as APY?
No. APR is a simple annual rate, while APY includes compounding within the year. A 12% APR compounded monthly equals a 12.68% APY. Loans are usually quoted in APR and savings accounts in APY, so convert one to the other before comparing them.
Why is my mortgage APR higher than the interest rate?
Because APR includes discount points, origination charges, and other lender fees paid at closing. One point costs 1% of the loan and usually lowers the interest rate. If you expect to sell or refinance within a few years, compare offers by their total cost over that period, not by APR alone.