APR Calculator
Find the true annual cost of a loan once fees and points are included
Loan Offer
The note rate the lender quotes
Origination, points, other lender fees
Rolled into the balance
Annual percentage rate (APR)
6.189%
Compared with a 6.000% note rate · $1,199.10 monthly payment
Monthly payment
$1,199.10
Amount financed
$196,000
what you actually receive
Finance charge
$235,676
interest + fees, the cost of credit
Total fees
$4,000
effective yearly rate 6.368%
APR at Different Fee Levels
| Fees Paid Upfront | Fees as % of Loan | APR | Above Note Rate |
|---|---|---|---|
| $0 | 0.00% | 6.000% | +-0.000 pts |
| $2,000 | 1.00% | 6.094% | +0.094 pts |
| $4,000 | 2.00% | 6.189% | +0.189 pts |
| $6,000 | 3.00% | 6.287% | +0.287 pts |
| $8,000 | 4.00% | 6.385% | +0.385 pts |
| $10,000 | 5.00% | 6.485% | +0.485 pts |
Why APR Differs From the Rate
The interest rate sets your payment. The APR also counts the fees you pay to get the loan, spread over its life, so it shows the true yearly cost of borrowing. Fees paid upfront mean you receive less than the loan amount but still repay all of it. Comparing APRs is the fairest way to compare loan offers.
The Formulas
Amount financed = loan − upfront fees
APR: rate where PV(payments) = amount financed
Finance charge = total payments − amount financed
Follows the US Truth in Lending approach; APR = monthly rate × 12.
Comparing Loan Offers
- •Compare APRs, not just interest rates, across lenders
- •Fees matter more on short loans, where they are spread over fewer payments
- •Ask which fees are negotiable, such as origination or processing fees
- •Paying points to lower the rate only pays off if you keep the loan long enough
- •Lenders in the US must disclose the APR before you sign