APR Calculator
Convert a loan's rate and fees into one true APR.
What APR measures
The annual percentage rate (APR) expresses the cost of borrowing, including fees, as one yearly rate. Two loans with the same interest rate can have very different APRs if one charges larger fees.
Example
A 20,000 loan at 7% for 5 years, with a 1.5% fee and 150 of fixed fees (450 in total), has a payment of about 396.02 and an APR of about 7.96%.
The calculation finds the rate at which the present value of your payments equals the money you really receive after fees. Some countries define the APR in slightly different ways, so your lender’s figure may differ a little.
Frequently asked questions
Why is APR higher than the interest rate?
Because fees reduce the money you receive while you repay the whole loan, so the effective cost goes up.
Does APR include compounding?
This one uses monthly payments and a yearly rate, the usual way lenders quote APR.
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