APR Calculator
Calculate the Annual Percentage Rate (APR) on loans.
Compare the true cost of borrowing including fees and interest over the life of a loan.
APR Results
What is APR?
APR (Annual Percentage Rate) is the true yearly cost of a loan, including fees. It is always higher than the stated interest rate because it includes additional costs.
APR vs Interest Rate:
- Interest rate: Just the cost of borrowing the principal
- APR: Interest rate + fees + other costs, spread over the loan term
How APR is calculated:
APR ≈ ((Total Interest + Fees) / Loan Amount) / Number of Years × 100
For a more accurate APR, the calculation uses an iterative method to find the rate that makes the present value of all payments equal to the net loan amount.
Why APR matters:
- Lets you compare loans fairly (even with different fees)
- Required by law to be disclosed by lenders
- A lower APR means a cheaper loan overall