APR Calculator
Calculate the Annual Percentage Rate (APR) including fees to see the true cost of any loan.
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Frequently Asked Questions
What is APR and why does it matter?
APR (Annual Percentage Rate) includes both the interest rate and fees expressed as a yearly rate. It shows the true cost of borrowing. A 7% interest rate loan with $1,500 in fees on $20,000 over 5 years has an APR of about 10.3% — significantly higher than the stated rate.
What is the difference between APR and interest rate?
The interest rate is only the cost of borrowing the money. APR includes the interest rate plus fees, points, mortgage insurance and other charges. By law, lenders must disclose APR. Always compare APR (not just interest rate) when shopping for loans.
What is a good APR for a loan?
Good APR varies by loan type: mortgage 6.6-7.3% (October 2026), auto loan 5-8%, personal loan 6-15% for excellent credit. Credit cards average 20-25% APR. Any APR below your alternatives is good. For mortgages, a difference of even 0.25% in APR saves thousands over the loan life.
APR versus interest rate: the same loan, four ways
The interest rate is what the lender charges on the balance. The APR adds the upfront fees (origination, points, some closing costs) and spreads them over the term, so it is the rate you would be paying if the fees were interest instead. On a fee-free loan the two are equal. The table shows a $10,000 loan at an 8% rate with a $300 fee, and what the term does to the APR.
| Loan | Rate | Fee | Term | Monthly payment | APR |
|---|---|---|---|---|---|
| $10,000 | 8% | $300 | 1 year | $869.88 | 13.77% |
| $10,000 | 8% | $300 | 3 years | $313.36 | 10.08% |
| $10,000 | 8% | $300 | 5 years | $202.76 | 9.30% |
| $10,000 | 8% | $500 | 3 years | $313.36 | 11.52% |
| $300,000 mortgage | 6.5% | $6,000 | 30 years | $1,896.20 | 6.695% |
| $300,000 mortgage | 6.5% | $12,000 | 30 years | $1,896.20 | 6.897% |
The payment is the same in every row with the same rate and term; the APR changes because the fee is spread over a different number of months.
Worked example
The $10,000 loan over 3 years at 8% with a $300 fee: you receive $9,700 but repay as if you borrowed $10,000, 36 payments of $313.36. The rate that makes 36 payments of $313.36 worth exactly $9,700 today is 10.08% a year. That is the APR. The same fee on a 1 year loan is spread over 12 payments and lifts the APR to 13.77%; on 5 years, to 9.30%. Short loans with fees are far more expensive than their rate suggests.
Comparing two offers
Lender A: 7.5% with a 4% origination fee. Lender B: 8.5% with no fee. On $10,000 over 3 years, A has a payment of $311.06 and an APR of about 10.3%; B has a payment of $315.68 and an APR of 8.5%. B is cheaper over 3 years by about $235 in total cost. Over 5 years the gap narrows because A's fee is spread thinner; over 7 years A wins. The APR comparison is only valid when the terms match, and it assumes you keep the loan to the end.
What APR leaves out
For mortgages, the APR by law includes origination fees, discount points, mortgage insurance and some third party fees, but not appraisal, title insurance or recording fees, so two lenders can report APRs that are not quite comparable. For credit cards, the APR is the interest rate alone (there are no upfront fees to add), compounded daily, which is why the effective annual cost is slightly above the stated APR. Variable rate loans quote an APR that only holds until the index moves.
When a higher APR is the better loan
If you expect to repay early. A no-fee loan at 9% beats a 7.5% loan with a 4% fee for anyone who pays it off in the first year or two, because the fee is sunk and the rate advantage has not had time to recover it. Run both offers through the calculator above with the period you actually expect to keep the loan, not the full term.