APR Calculator
APR (Annual Percentage Rate) is the yearly cost of a loan including fees and interest. To calculate: add all fees to interest, divide by loan amount, divide by loan term in years, multiply by 100. For credit cards, APR converts to daily rate (APR/365) for interest charges. A $10,000 loan at 5% with $500 in fees has 7% APR. APR is always higher than interest rate when fees exist.
Calculate Annual Percentage Rate (APR) for loans including fees. Compare loan offers to find the true cost of borrowing.
Calculator Mode
Loan Amount
$
Loan Term
months
Interest Rate
%
Fees (origination, closing, etc.)
$
Annual Percentage Rate (APR)
5.68%
Effective APR (with compounding): 5.83%
Monthly Payment
$489.15
Total Interest
$4,349.22
Total Cost (with fees)
$29,849.22
Understanding APR
- APR includes interest rate PLUS fees, giving true cost of borrowing
- Higher fees = higher APR even with same interest rate
- Compare APRs to find the best loan offer
- Effective APR accounts for compounding and is always higher than nominal APR
How to Use
- Enter your value in the input field
- Click the Calculate/Convert button
- Copy the result to your clipboard
Frequently Asked Questions
- What is APR?
- APR (Annual Percentage Rate) is the yearly cost of borrowing including interest and fees, expressed as a percentage. APR is typically higher than the base interest rate because it includes origination fees, closing costs, and other charges.
- What is the difference between APR and interest rate?
- Interest rate is just the cost of borrowing principal. APR includes interest rate PLUS fees (origination, closing, points). A loan at 5% interest with $2,000 in fees might have 5.3% APR. Compare APRs, not just interest rates.
- How is APR calculated?
- APR calculation: Add all loan costs (interest + fees), spread over loan term, express as annual rate. Complex formula accounts for payment timing. Federal Truth in Lending Act requires lenders to disclose APR for comparison shopping.
- Is a lower APR always better?
- Usually, but consider context. Lower APR with longer term may cost more total. Compare total cost of loan, not just APR. Also consider: loan flexibility, prepayment penalties, points vs no points. APR best compares similar loan structures.
- What is APY vs APR?
- APR = Annual Percentage Rate (loans, cost of borrowing). APY = Annual Percentage Yield (savings, earnings with compound interest). APY accounts for compounding frequency, so 5% APY > 5% APR when compounded. For savings, higher APY is better.