APR Calculator

The interest rate is the price of borrowing the money itself — the percentage a lender charges on your outstanding balance each year. The APR (annual percentage rate) takes that same interest and folds in the mandatory fees you pay to get the loan, then re-expresses the total as a single yearly percentage. Because APR includes those extra costs, it is almost always higher than the interest rate, and it is the number that lets you compare two offers on equal footing.

A quick way to remember it: the interest rate answers "what does the money cost?" while APR answers "what does the whole loan cost?" The two figures are equal only when a loan carries zero fees.

Worked contrast: the lower rate isn't always cheaper

Two lenders quote you an illustrative 30-year, $200,000 loan. Lender A offers a lower interest rate but charges heavy fees; Lender B offers a slightly higher rate with light fees. Comparing interest rates alone points you to Lender A — but once the fees are folded in, APR tells a different story. (All figures below are illustrative and rounded for teaching; your actual quote depends on your lender and credit profile.)

Lender A wins on interest rate, but its $7,000 in fees push the true cost above Lender B. Ranked by APR — the fee-inclusive figure — Lender B is the marginally cheaper loan. This is exactly why federal disclosure rules require lenders to quote APR alongside the interest rate.

APR captures fees by treating them as if they were part of the interest you pay. The calculator finds the single rate that makes the loan's scheduled payments "add up" to the amount you actually received after fees were deducted. Because you got less money but still repay the full balance, that break-even rate lands above the note rate.

Step-by-step: a $200,000 mortgage with $4,000 in fees

Using an illustrative 6.00% interest rate on a 30-year, $200,000 loan with $4,000 in lender fees ($3,000 origination + $1,000 underwriting):

1. Find the monthly payment at the note rate. Using the amortization formula M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1] with P = $200,000, r = 0.06 ÷ 12, and n = 360, the monthly payment is about $1,199. The interest rate — not the APR — drives this payment.
2. Subtract the fees from what you receive. You borrow $200,000 but $4,000 goes to fees, so the amount actually financed is $196,000.
3. Solve for the fee-inclusive rate. Find the rate that makes 360 payments of $1,199 present-value back to $196,000 (not $200,000). Solving this gives an annualized rate of about 6.19%.
4. Read the result. The APR is about 6.19% versus the 6.00% note rate — the $4,000 in fees adds roughly 0.19 percentage points.

The same $4,000 fee would move APR far more on a short loan. Spread over 30 years it adds about 0.19 points; spread over a 5-year auto loan the identical fee could add well over a full percentage point, because there are far fewer payments to absorb the cost. This is why APR matters most on short-term, fee-heavy loans — the shorter the term, the more each fee dollar inflates the true rate. Enter your own numbers in the calculator above to see the exact APR for any loan amount, rate, term, and fee combination.

The three examples below cover the situations borrowers ask about most: a loan with both an origination fee and discount points, two offers with the same interest rate but different fees, and a short-term auto loan where fees hit hardest. Every figure is illustrative — round numbers chosen for clear math, not quotes from any lender. Recreate any of them in the calculator above by entering the same inputs.

Example 1: Origination fee plus discount points on a mortgage

Suppose you take an illustrative $250,000, 30-year mortgage at a 6.25% note rate, paying 1 discount point ($2,500), a $1,500 origination fee, and $1,000 in underwriting and processing charges — $5,000 in total fees.

1. Monthly payment at the note rate: with P = $250,000, a monthly rate of 0.0625 ÷ 12, and 360 payments, the amortization formula gives about $1,539 per month.
2. Amount actually financed: $250,000 − $5,000 in fees = $245,000.
3. Solve for the fee-inclusive rate: the rate that makes 360 payments of $1,539 present-value back to $245,000 works out to roughly 6.44% APR.

The point and fees add about 0.19 percentage points to the 6.25% note rate. Whether the point is worth it depends on how long you keep the loan — the lower payment has to run long enough to earn back the $2,500 you paid upfront.

Example 2: Same interest rate, different APR

Two lenders each quote an illustrative $300,000, 30-year loan at 6.50%. Because the note rate, amount, and term are identical, the monthly payment is identical too: about $1,896. The payment cannot tell these offers apart — only APR can.

Same rate, same payment — but Lender Y collects $6,000 more at closing, and the APR gap of roughly 0.20 percentage points is the only number on the disclosure that reveals it.

Example 3: A five-year auto loan, where fees bite hardest

Now an illustrative $30,000 auto loan over 5 years at a 7.00% note rate with $1,200 in documentation and origination fees. The payment at the note rate is about $594 per month, and the amount financed after fees is $28,800. Solving for the fee-inclusive rate gives an APR of roughly 8.73% — the $1,200 fee adds about 1.7 percentage points, nearly nine times the impact the same dollar amount of fees would have on a 30-year mortgage. Stretch the identical loan to 10 years and the same $1,200 fee adds only about 0.9 points (~7.93% APR), because more payments absorb the cost. Before financing a car, estimate your payment with the auto loan calculator and see our guide to getting the best auto loan rate.

A fee's impact on APR depends on how large it is relative to the loan and how many payments there are to absorb it. The two tables below hold everything constant except loan size, then loan term, so you can see each effect in isolation. All rows are illustrative and use the same method as the worked examples above.

Same $4,000 fee, three loan sizes (30-year term, 6.50% note rate)

The dollar fee is identical in every row, but on the smaller loan it represents a larger share of the money borrowed, so the APR climbs further. This is why flat junk fees are proportionally hardest on small-balance borrowers.

Same $900 fee, three loan terms ($30,000 loan, 7.00% note rate)

Shorter terms concentrate the fee into fewer payments, so the same $900 more than doubles its APR impact going from 7 years to 3. When comparing short-term offers — auto loans, personal loans — a "small" fee can quietly outweigh a small rate difference. To see how each payment splits between principal and interest over any term, read our amortization guide, and if you're weighing personal-loan offers, our guide to personal loan rates by credit score shows how fees and rates typically move together.

You can reproduce any lender's APR (to within rounding) with five steps and a spreadsheet — or let the calculator above do all five instantly:

1. Add up the included finance charges. Count origination fees, discount points, and lender charges such as underwriting and processing. Third-party costs like appraisal and title fees are usually excluded.
2. Subtract the fees from the loan amount. The result is the amount financed — the money you effectively receive. Borrow $250,000 with $5,000 in fees and the amount financed is $245,000.
3. Compute the scheduled payment from the note rate. Use the amortization formula (or any loan calculator) with the full principal, the stated interest rate, and the term. Fees never change this payment.
4. Solve for the rate that connects the two. Find the monthly rate at which the stream of payments is worth exactly the amount financed today. In a spreadsheet: =RATE(months, -payment, amountFinanced).
5. Annualize it. Multiply the monthly rate by 12. That percentage is the APR — if it's well above the note rate, fees are doing real damage.

How to check your APR on a loan you already have

You don't need to calculate anything to find the APR on an existing account — lenders are required to disclose it:

1. Credit cards: the Interest Charge Calculation table on every monthly statement lists the APR for each balance type (purchases, cash advances, balance transfers). It also appears in your online account and cardmember agreement.
2. Mortgages: page 3 of your Loan Estimate and Closing Disclosure shows the APR in the Comparisons section, right beside the interest rate.
3. Auto and personal loans: the Truth in Lending disclosure in your contract prints the APR in a labeled box — typically the first box, ahead of the finance charge and amount financed.
4. No paperwork handy? Check your lender or servicer's online portal, or call and ask — they must tell you.
5. Want to verify it? Enter your loan amount, rate, term, and the fees you paid into the calculator above and compare the result against the disclosed figure.