APR Calculator
Find the true Annual Percentage Rate of a loan once origination fees are folded in, so you can compare offers on an even footing instead of trusting the advertised note rate. Solves the APR by Newton-Raphson iteration from your loan amount, fees, payment, and term.
How to Use
- Enter the loan amount you actually receive (the principal disbursed to you).
- Enter the fees — origination, points, and other finance charges paid to get the loan.
- Enter the fixed monthly payment from the loan offer.
- Enter the term in months (e.g. 60 for a 5-year loan, 360 for a 30-year mortgage).
- Read the APR — the calculator iterates to the rate at which the payments exactly repay the net amount you received after fees.
Show Work
Notes
About the APR Calculator
The APR Calculator is a free tool for personal-finance and money decisions. It runs right in your web browser, so there is nothing to download. Find the true Annual Percentage Rate of a loan once origination fees are folded in, so you can compare offers on an even footing instead of trusting the advertised note rate. Solves the APR by Newton-Raphson iteration from your loan amount, fees, payment, and term.
How it works
Type your numbers into the boxes. The answer shows up right away — you do not have to press a button. If you change a number, the answer changes too. So you can try different numbers and watch what happens, or check an answer you worked out yourself. Just make sure each box has the right kind of number in it.
Want the deeper story? The Knowledge Base explains the ideas behind the tools in more detail.
Frequently Asked Questions
What is the difference between APR and the interest rate?
The interest rate (note rate) is the cost of borrowing the principal alone. APR rolls the interest rate together with most up-front finance charges — origination fees, discount points, certain closing costs — into a single annualized figure. Because of those fees, APR is always equal to or higher than the note rate, which is exactly why it is the fairer number for comparing loans.
Why is the APR required to be disclosed?
In the U.S., the Truth in Lending Act (TILA) requires lenders to disclose the APR so borrowers can compare loans on a standardized basis. Two loans with the same 6% note rate can have very different APRs if one charges $6,000 in fees and the other charges nothing. This figure is an estimate for comparison; rely on the lender's official disclosure before signing.
Do more fees always mean a higher APR?
Yes — every dollar of fees reduces the net amount you actually receive while leaving the payments unchanged, which pushes the effective rate up. The shorter the loan term, the bigger the impact, because the fees are spread over fewer payments. On a 30-year mortgage the same fee barely moves the APR; on a 2-year loan it can add a full percentage point or more.
Is APR the same as APY?
No. APR is a simple annualized rate that ignores intra-year compounding, while APY (annual percentage yield) accounts for it: APY = (1 + APR/n)^n − 1. APR is used for borrowing costs; APY is used for savings and deposit yields. For a given nominal rate, APY is slightly higher than APR.
Why does the calculator use Newton-Raphson iteration?
There is no closed-form algebraic solution for the rate that makes a stream of fixed payments equal a given net loan amount, so the rate has to be found numerically. Newton-Raphson starts with a guess and refines it repeatedly until the present value of the payments matches the financed amount, converging on the APR in a handful of steps.
How do I use the APR Calculator?
Simply type your numbers and read the result, which refreshes the instant you change something. There is nothing to submit and nothing to wait for.
Is it free? Does it work without internet?
Yes to both. It is free with no sign-up, and once the page has loaded it keeps working even with no internet.
Where does my data go?
Nowhere — every calculation runs on your own device. Nothing you enter is uploaded, logged, or stored.
Common Use Cases
Comparing two loan offers
Plug both offers in and compare APRs rather than note rates to find the genuinely cheaper loan once fees are included.
Evaluating mortgage points
Add the cost of discount points to fees and see whether the lower note rate actually produces a lower APR over your expected hold period.
Checking an auto-loan quote
Confirm the dealer-disclosed APR is right, or back out the true cost when fees are bundled into the financed amount.
Spotting hidden financing costs
Reveal how much a "no-interest" or low-rate promotion really costs once origination and processing fees are accounted for.
Verifying a TILA disclosure
Reproduce the APR figure on a lender disclosure statement to make sure the numbers add up before you sign.
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