APR Calculator
Estimate the Annualized Cost of Borrowing
Use this free APR Calculator to estimate the annualized cost of a loan from the interest rate, payment schedule, and finance charges you enter.
Estimated APR Calculator
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Estimated Annual Percentage Rate
Loan Cost Breakdown
| Item | Amount |
|---|---|
| Nominal Interest Rate | – |
| Estimated APR | – |
| Difference (APR – Nominal) | – |
| Monthly Payment | – |
| Finance charges treated as APR costs | |
| Origination Fee | – |
| Discount Points Cost | – |
| Other Finance Charges | – |
| Less: Lender Credits | – |
| Net Finance Charges (in APR) | – |
| Not included in APR | |
| Other Closing Costs | – |
Loan Amortization Summary
Year-by-Year Amortization Table
| Period | Principal Paid | Interest Paid | Remaining Balance |
|---|---|---|---|
| Run the calculator to view the amortization table. | |||
Frequently Asked Questions
What is an APR Calculator?
An APR Calculator estimates the annualized cost of a loan by combining the interest rate with selected finance charges such as origination fees and discount points. The result is expressed as a single yearly percentage so that offers with different fee structures can be compared more fairly.
How is APR different from the interest rate?
The interest rate reflects the cost of the principal alone. APR is designed to reflect the cost of the principal plus certain finance charges. When charges are included, APR often sits above the nominal rate, but the two can be very close if lender credits offset those charges.
How is APR calculated?
The calculator first converts the nominal rate to an effective annual rate using the compounding frequency, then converts that annual rate to a per-payment-period rate using the payment frequency. It then finds the periodic rate that makes the present value of all scheduled payments equal to the net amount received by the borrower.
Is a lower APR always better?
APR is useful for comparing borrowing costs under comparable terms, but it should be considered alongside upfront costs, total interest, loan term, and how long you expect to keep the loan.
Which fees typically go into APR?
Common inclusions are origination fees, discount points, and other lender-imposed finance charges. Late fees, prepayment penalties, and many third-party closing costs are usually excluded.
Why does APR matter for comparing loans?
Two lenders can quote the same interest rate and still charge very different fees, which changes the real cost of the loan. Comparing APR side by side makes it easier to spot which offer is genuinely less expensive.
Does APR include discount points?
Discount points are upfront charges paid to reduce the interest rate on a loan. In mortgage contexts, one point is typically equivalent to 1% of the loan amount.
Can APR be lower than the interest rate?
In many standard cases, APR comes out at or above the nominal interest rate because finance charges are added. However, the relationship depends on the fee structure, lender credits, and compounding conventions.
Is APR defined the same way in every country?
No. Disclosure rules differ between jurisdictions. The United States has consumer credit rules under the Truth in Lending Act, while the UK and EU operate under their own consumer credit frameworks.
Can I use this calculator for an adjustable-rate mortgage?
APR comparisons for adjustable-rate loans require additional assumptions about future rate changes that this calculator does not model. This tool is primarily designed for loans whose payment and interest-rate structure can be represented by the inputs you enter.
Does this APR Calculator support biweekly or weekly payments?
Yes. You can choose monthly, biweekly, or weekly payment frequency. The calculator converts the nominal rate into an effective annual rate first, then into a per-payment-period rate, so the math stays consistent across every combination.
How accurate is this APR estimate?
The result is a strong estimate when the inputs are correct. Final APRs quoted by a lender may differ slightly because of rounding conventions, day-count rules, and differences in which charges are treated as finance charges.