APR calculator

Enter the loan, its rate, term and fees to get the APR: the rate you're really paying once the fees are counted.

Origination fee, points, application and processing fees.

On if the fees are added to the balance rather than paid up front.

  1. Amount borrowed$25,000.00
  2. Fees and closing costs$500.00
  3. Cash you actually receive$24,500.00
  4. Monthly payment at 6.9% over 60 months$493.85
  5. Interest rate on the note6.90%
  6. Total interest$4,631.00
  7. Total cost of borrowingInterest plus fees$5,131.00
APR 7.75%

Estimates only. Lenders include different fees in disclosed APRs. Not financial advice.

Last updated 13 Sep 2026.

How to use it

  1. Enter the loan amount, the interest rate on the note and the term in months.
  2. Add up the fees: origination, points, underwriting, anything the lender charges to make the loan.
  3. Turn on the toggle if those fees are added to the balance instead of paid at closing.
  4. Compare the APR across offers. The lower APR is the cheaper loan if you keep it to term.

Worked example

A $25,000 car loan at 6.9% for 60 months with $500 in fees paid at closing.

Payment is $493.85. You receive $24,500. The rate that makes 60 payments of $493.85 worth $24,500 today is 7.75% APR. Total cost of borrowing: $4,631.00 in interest plus $500 in fees.

How it's calculated

  1. payment = the level monthly payment on the amount borrowed at the note rate

  2. cash received = amount borrowed − fees (or the original amount, if fees are financed)

  3. APR = the annual rate at which the present value of all payments equals the cash received

Step 3 has no closed form, so the calculator solves it by bisection to within 0.001%. This is the Truth in Lending Act definition used on US loan disclosures; lenders may include or exclude specific fees, which is why disclosed APRs vary slightly.

FAQ

Why is the APR higher than the interest rate?

Because the fees are counted as part of the cost of borrowing and spread across the term. The shorter the loan, the more a fixed fee pushes the APR up: $500 on a 12-month loan adds far more APR than $500 on a 30-year mortgage.

Is a lower APR always the better loan?

Only if you keep the loan to term. Points and fees are paid up front, so a low-rate, high-fee loan wins over the long run and loses if you refinance or sell early. Compare the total cost over the years you expect to keep it.

Which fees are in a mortgage APR?

Points, origination fees, mortgage insurance, and most lender charges. Appraisal, title and recording fees are usually excluded. Ask for the Loan Estimate; it lists exactly what went into the disclosed APR.

What about a 0% APR offer?

If there are no fees, 0% is real. Retail 0% offers are usually deferred interest: miss the payoff date and interest is charged from day one. Enter the deferred rate here to see what that would cost.