APR Calculator
Calculate the Annual Percentage Rate (APR) of a loan including fees and closing costs for true cost comparison.
Input Parameters
Results
APR vs Interest Rate
APR includes the interest rate plus all fees and costs, giving a true cost comparison between loans. Always compare APR, not just the interest rate, when shopping for mortgages or loans.
What is the APR Calculator?
The Annual Percentage Rate (APR) Calculator reveals the true cost of borrowing money. By law, banks must disclose the APR, which combines the base interest rate with any hidden origination fees, closing costs, or points into one single percentage.
How It Works (Algorithm)
If you borrow $100,000 but the bank charges a $5,000 fee, you only actually received $95,000. However, your interest is calculated on the full $100k. The calculator runs an amortization schedule on the $100k, but forces the calculation against the $95k net loan to find the true, much higher APR.
$$ \text{APR} = \left( \frac{\text{Total Interest} + \text{Total Fees}}{\text{Principal}} \right) \div \text{Years} \times 100 $$
The standardized regulatory calculation for transparency in lending.
How to Use It
Enter your loan amount, the stated interest rate, and the loan term. Crucially, enter all upfront fees the bank is charging you (origination, processing, points). The calculator will reveal the actual, federally-defined APR you are paying.