APR Calculator
Enter the rate a lender quotes and the fees they charge up front. Get the APR you'd see on the Truth in Lending disclosure: one number to compare offers honestly.
Annual percentage rate
The cost of your credit as a yearly rate.
Finance charge
The dollar amount the credit will cost you.
Amount financed
The amount of credit provided to you.
Total of payments
What you'll have paid after all scheduled payments.
Payment schedule: 60 monthly payments of $415.17.
The same fee, spread over different terms
A flat fee costs much more, in APR terms, on a short loan. Change the term to move the dot.
Explain my numbers in plain English
Sends only the numbers shown above (and your question) to an AI model via Vercel AI Gateway. Nothing is stored. It's a plain-language read, not financial advice.
How APR is worked out
The lender calculates your payment on the full loan amount at the note rate. But if fees are taken up front, you only receive the loan minus those fees. The APR is the rate that makes your actual payments exactly repay what you actually received:
Amount received = Payment × (1 − (1 + i)−n) ÷ i → APR = i × 12
There's no algebraic shortcut for i, so it's found by trial and error; this page does it in a fraction of a millisecond. The Truth in Lending Act (Regulation Z) allows the disclosed APR to be off by no more than 0.125 percentage points on a regular loan, so if your number and the lender's differ by more, ask which fees they included.
Questions people ask
What is APR?
Annual percentage rate: the yearly cost of a loan including the interest rate and most upfront finance charges, like origination fees, points and some closing costs. The Truth in Lending Act requires US lenders to disclose it so you can compare offers on one number.
How do you calculate APR from fees?
Find the payment on the full loan at the note rate. Then find the rate at which that same payment would repay only the amount you actually received (the loan minus prepaid fees). That rate, annualized, is the APR. The calculator solves it numerically.
Why is APR higher than my interest rate?
Because fees mean you receive less than you owe, while your payments stay the same. The gap is larger on short loans, because the fee is spread over fewer payments.
Is APR the same as APY?
No. APY (annual percentage yield) includes compounding and is used for savings. APR on an installment loan is the periodic rate times the number of periods per year, without compounding.
Which fees count toward APR?
Under Regulation Z, finance charges such as origination fees, discount points and mortgage broker fees are included. Some costs, like appraisal, title insurance and credit report fees on mortgages, are excluded. Check the finance charge box on your disclosure.