What a loan really costs per year, fees included
The interest rate on a loan agreement tells you what the balance costs. It leaves out the origination fee, points or processing fee you pay to get the loan. This APR calculator puts them back in. Enter the loan amount, the interest rate, the term and the fees, and it finds the annual percentage rate: the single yearly rate at which the money you actually receive equals the payments you make.
It works for a personal loan, a car loan or a mortgage, in dollars, rupees, pounds or euros. Alongside the APR it shows the four figures of a US Truth in Lending disclosure — amount financed, finance charge, total of payments and the payment itself. Everything runs in your browser; the results are estimates, not financial advice.
How to use the APR Calculator
- Pick an example — personal loan, car loan or mortgage — or choose My own figures.
- Enter the loan amount, the interest rate from the agreement, the term and how often you pay.
- Enter fees as a percentage (origination fee, points) and as an amount (lender or processing fees).
- Say whether the fees are paid upfront or deducted from the money you receive, or added to the loan.
- Read the APR, the gap above the note rate, and the Truth in Lending-style figures. Copy them to compare offers.
APR Calculator features
Regulation Z method
The actuarial method of Appendix J: a periodic rate × payments a year, with level payments.
Fees upfront or financed
Both cases give the right amount financed, so the APR is correct either way.
Any payment frequency
Monthly, twice a month, biweekly, weekly or quarterly.
Truth in Lending figures
Amount financed, finance charge and total of payments, as they appear on a US disclosure.
How APR is calculated
Amount financed = the loan amount minus fees paid upfront or deducted (if fees are added to the loan, it is the original amount you asked for). Payment = L × i ÷ (1 − (1 + i)^−n), where L is the amount you repay, i the note rate per period and n the number of payments. The calculator then solves for the periodic rate that makes the payments worth exactly the amount financed and multiplies it by the payments a year. The finance charge is the total of payments minus the amount financed.
Worked example: $10,000 at 12% for three years with a 5% origination fee taken from the loan. The payment is $332.14 and you receive $9,500, so the APR is about 15.6%, and the finance charge is $2,457.15. Without the fee the APR would be exactly 12%.
APR in US and Indian rules
- United States: the Truth in Lending Act and Regulation Z (12 CFR 1026.22) define APR as the cost of credit as a yearly rate, relating the amount and timing of what you receive to what you pay. For regular loans the disclosed APR must be within 1/8 of a percentage point of the actuarial figure. Which fees count is set by 1026.4: origination fees and points do; some real-estate charges such as title and appraisal fees do not.
- India: RBI’s circular on the Key Facts Statement (RBI/2024-25/18, 15 April 2024) requires banks and NBFCs to show the APR, covering all their charges plus third-party charges they collect such as insurance, for retail and MSME term loans sanctioned from 1 October 2024. Include GST on fees.
- APR assumes you keep the loan for its full term. Repay early and fees paid upfront are spread over fewer months, so your real yearly cost is higher.
APR vs interest rate vs effective rate
The interest rate sets the payment. The APR adds the fees. The effective annual rate compounds the periodic rate — (1 + i)^12 − 1 for monthly payments — and is always a little higher than the APR. To line up several offers with fees, insurance and prepayment charges, use the loan comparison calculator; for one Indian personal loan in detail, the personal loan calculator.
APR Calculator FAQ
How do I calculate APR on a loan?
Subtract the fees from the loan to get the amount financed, work out the payment at the note rate, then find the rate at which those payments repay the amount financed. The APR calculator does this by iteration, as Regulation Z’s actuarial method does.
Is APR the same as the interest rate?
Only when there are no fees. Any origination fee, points or processing fee makes the APR higher than the interest rate.
What is a good APR on a car loan?
It depends on your credit, the term and the market; compare dealer and bank offers by APR, not by payment. A longer term lowers the payment but raises the finance charge.
Does APR include insurance?
In the US, voluntary credit insurance can be left out if it is disclosed and you agree in writing; required insurance counts. In India the KFS APR includes insurance the lender collects. Enter it in Other fees if it is part of your loan cost.
Why is my effective rate higher than the APR?
APR multiplies the periodic rate by the number of payments; the effective annual rate compounds it, which gives a slightly higher number.