APR Calculator

About the APR Calculator

The Annual Percentage Rate (APR) is one of the most important numbers to understand when you're borrowing money. Unlike the simple interest rate, the APR gives you a more complete picture of a loan's true cost because it includes not only the interest but also most of the fees associated with the loan, such as origination fees, closing costs, and points.

How it Works

This calculator helps you determine the APR of a loan so you can make a true "apples-to-apples" comparison between different loan offers.

• Loan Amount: The initial principal amount you are borrowing.
• Nominal Interest Rate: The "advertised" interest rate of the loan, without fees.
• Loan Term: The total time you have to repay the loan, in years.
• Loan Fees & Costs: This is where you add all the extra lender charges. This includes origination fees, processing fees, underwriting fees, and any other costs required to get the loan.

Why APR is Important

A loan with a lower interest rate might look cheaper, but if it has high fees, its APR could actually be higher than a loan with a slightly higher interest rate and no fees. The APR translates all those extra costs into a single, standardized percentage, giving you a more accurate way to compare offers and understand what you're really paying. Federal law (the Truth in Lending Act) requires lenders to disclose the APR for this very reason.