APR Calculator (True Cost of a Loan)
Find the real annual cost of a loan: enter amount, rate, term and upfront fees to get the APR, monthly payment and total repayment.
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Why APR Instead of the Advertised Rate?
Lenders advertise a nominal interest rate, but origination fees, insurance and other upfront charges mean you effectively borrow less than you repay interest on. The Annual Percentage Rate (APR) folds those fees into a single comparable yearly figure: the tool computes the monthly payment from the nominal rate, subtracts the fees from the money you actually receive, and solves the internal rate of return of that cash flow.
You also get the effective annual rate (compounding only, no fees) so you can see how much of the gap comes from fees versus monthly compounding. Comparing two offers? The lower APR is the cheaper loan — regardless of how the advertised rates look. Everything runs in your browser.
Frequently Asked Questions
What is the difference between nominal rate, effective rate and APR?
The nominal annual rate is the monthly rate ×12 with no compounding. The effective annual rate compounds the monthly rate ((1+i)¹²−1) but ignores fees. APR additionally accounts for upfront fees by treating them as money you never received, so it is the truest yearly cost.
Which fees should I include?
Any one-time charge paid at disbursement: origination/arrangement fee, mandatory insurance premiums, appraisal and file costs. Do not include charges you would pay anyway without the loan.
How is the APR solved mathematically?
The tool finds the monthly rate at which the present value of your payments equals the net amount you received (loan minus fees) using numerical root finding (bisection), then annualises it with compounding.
Does this match the APR my bank discloses?
It uses the standard actuarial method required by most regulators (EU/US style). Small differences can appear if your lender spreads fees monthly or uses day-count conventions, but it is typically within a few tenths of a percent.
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APR Calculator (True Cost of a Loan)