Loan APR Calculator
The interest rate is what the loan earns on the full amount. The APR is what it costs you against the cash you actually receive — fees shrink that cash, so the APR is always the more honest number. Enter a loan and its fees and see both.
Fees means everything taken out before you see the money — origination, application, broker and documentation fees. If a fee is financed instead (added to the balance), use the Personal Loan Calculator, which models that case.
How it works
The payment is computed on the full loan amount at the stated rate. The true APR then solves backwards: it is the rate at which those payments would be worth exactly the cash you receive (amount minus upfront fees). Smaller received cash against the same payments means a higher true rate — that gap is the fee’s real price tag.
Formula & worked example
Formula: The payment is computed on the full loan amount at the stated rate: payment = P × r ÷ (1 − (1 + r)^−n), r = rate ÷ 12. The true APR then solves backwards — the rate at which those same payments are worth exactly the cash you receive (amount − upfront fees): payment × (1 − (1 + APR/12)^−n) ÷ (APR/12) = cash received.
Worked example: Borrow $10,000 at 10% for 36 months with $500 of fees: the payment is $322.67 on the full amount, but you receive only $9,500, so the true APR is 13.56%. Total cost: $11,616.19 of payments for $9,500 in hand — $2,116.19 of interest and fees. With zero fees the APR is exactly 10.00%.
Frequently asked questions
What does a $500 fee do to a $10,000 loan at 10%?
The payment is $322.67 a month on the full $10,000 — but you only receive $9,500, so the true APR is 13.56%, not 10%. The fee also means the loan’s total cost is $11,616.19 of payments for $9,500 of cash: $2,116.19 of interest and fees combined.
Why is APR higher than the interest rate?
Because the rate is charged on the full amount while fees are skimmed off the top. You pay interest as if you borrowed $10,000 but only got $9,500 — the APR is the rate that tells the truth about that deal. With zero fees, the two numbers are identical.
Which number should I compare when shopping loans?
The APR — it already prices in most fees, so two loans with different rates and different fees become comparable. Then check the total cost line too: a longer term can show a friendlier APR while costing far more overall.
Are mortgage APRs computed the same way?
The principle is identical, but mortgage disclosures include a regulated list of closing costs, and the payment also retires the full amount. For home loans, compare the APR on the official Loan Estimate documents — and model the payment itself with the Mortgage Calculator.
🏠 A line of credit instead?
The HELOC Calculator prices the draw and repayment phases of a home equity line — the variable-rate alternative.