APR Calculator
Find the true annual percentage rate (APR) of a loan once fees are included, plus the monthly payment and total cost. Compare loans on a fair basis.
How it works
How APR is found
Payment = based on loan amount and note rate APR = the rate where: Loan − Fees = present value of all payments at that rate
The note rate sets your payment, but the APR reflects what the loan really costs once fees are counted. Because you receive less than the loan amount (fees come off the top) but still repay the full schedule, the effective rate is higher. There is no closed-form solution, so the APR is found numerically.
Worked example
A $250,000 loan at a 6.5% note rate over 30 years with $4,000 in fees has a monthly payment of about $1,580.17, but an APR of about 6.65% — the fees add roughly 0.15 percentage points to the true cost.
Frequently asked questions
Why is the APR higher than the interest rate?
The interest rate applies only to the loan balance, while the APR also folds in upfront fees and points. Since those fees increase your cost without increasing what you borrow, the APR ends up higher than the note rate.
Should I compare loans by rate or APR?
APR is the better single-number comparison because it captures fees. But it assumes you keep the loan for the full term — if you plan to move or refinance early, high upfront fees hurt more than the APR suggests.
Does APR include all costs?
APR includes finance charges like points and lender fees, but definitions vary by jurisdiction and it typically excludes some third-party costs. Always check what a specific lender includes.