APR Calculator
Calculate Annual Percentage Rate including fees and interest
About this Tool
The APR (Annual Percentage Rate) calculator determines the true cost of borrowing by including both interest rates and all associated fees in a single percentage. Unlike simple interest rates, APR provides a complete picture of loan costs, making it easier to compare different loan offers fairly. By law, lenders must disclose APR for consumer loans, helping borrowers make informed decisions. This calculator accounts for origination fees, closing costs, processing fees, and other charges that affect the total cost of borrowing.
Common Use Cases
Loan Comparison
Compare different loan offers fairly by looking at APR instead of just interest rates. A lower rate with high fees may have a higher APR than a higher rate with no fees.
Mortgage Shopping
Evaluate mortgage offers from different lenders. Closing costs and points significantly affect APR, revealing the true cost of home financing.
Credit Card Analysis
Understand the real cost of credit card balances. Credit cards disclose APR including fees, helping you choose the best card for your usage pattern.
Auto Loan Decisions
Calculate the true cost of car financing including dealer fees, documentation charges, and other costs to negotiate better deals.
Pro Tips
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APR vs Interest Rate
Interest rate is the cost of borrowing the principal. APR includes the interest rate plus all fees, points, and charges, showing the total cost as a percentage.
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Lower APR Isn't Always Better
Consider loan terms and your plans. A 30-year mortgage with slightly higher APR but no prepayment penalty may be better than lower APR with restrictions if you plan to pay early.
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Watch for Variable APRs
Credit cards and some loans have variable APRs that change with market rates. Initial low APRs may increase significantly, affecting long-term costs.
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Calculate Break-Even
For mortgages with points (prepaid interest), calculate how long you need to keep the loan to break even on the upfront cost versus monthly savings.