APR Calculator

Find the annual percentage rate of a loan including upfront fees, so you can compare offers on their true cost.

  • Reviewed October 2026
  • Formula and worked example below
  • Free, no sign-up, runs in your browser
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Origination, underwriting or other required charges.
Enter your numbers to see the result.

Interest rate vs APR

The interest rate is what the lender charges on the money you borrow. The annual percentage rate (APR) also accounts for required fees, expressed as a yearly rate. Under the US Truth in Lending Act, lenders must disclose APR so borrowers can compare loans on equal terms.

How APR is calculated

Your monthly payment is based on the full loan amount at the stated rate. But if fees are deducted or paid up front, you effectively receive less money while repaying the same payments. The APR is the rate at which the payments exactly repay the amount you actually received. The calculator solves for that rate numerically.

A $20,000 loan at 9% for 60 months has a payment of $415.17. With $800 in fees you effectively receive $19,200, so the APR is 10.76%. A competing loan at 9.75% with no fees would be cheaper, even though its headline rate is higher.

APR on mortgages

Mortgage APRs include points, origination fees and mortgage insurance but not every closing cost (title insurance and appraisal are often excluded). Because APR spreads fees over the full term, it understates the cost of fees if you sell or refinance early. If you expect to move within a few years, favor loans with lower upfront costs even if the APR is similar.

APR vs APY

APR describes borrowing costs and does not include compounding. APY (annual percentage yield) describes savings returns and does include compounding. A credit card with a 24% APR compounded daily actually costs about 27% a year.

Frequently asked questions

Why is my APR higher than my interest rate?

Because APR includes fees such as origination charges. The more fees and the shorter the loan, the bigger the gap.

Is a lower APR always better?

Usually, when loans have the same term. For short holding periods, compare total upfront costs too, because APR spreads fees over the full term.

Are APR and APY the same?

No. APR is used for loans and excludes compounding; APY is used for savings and includes compounding.

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Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.