APR reflects the real yearly cost of borrowing by folding upfront fees into the interest rate.
APR Calculator
Reviewed
ResultUpdates as you type
Apr7.274%
Monthly payment$386.66
Nominal rate6%
Total fees$600.00
- Amount borrowed84.0%
- Interest13.4%
- Fees2.5%
Find the true annual percentage rate of a loan once fees are included.
APR reflects the real yearly cost of borrowing by folding upfront fees into the interest rate.
Formula
APR
Solve for i: (Amount − Fees) = M · (1 − (1+i)^−n) / iAPR = 12 · i, where M is the payment based on the note rate.Frequently asked questions
Why is APR higher than the interest rate?
Because fees reduce the money you actually receive while your payments stay the same, the effective cost — the APR — is higher than the quoted rate.
Should I compare loans by APR?
APR is the best single number for comparing similar loans, but it assumes you keep the loan for the full term.