How to use the APR calculator
Enter the amount you want to borrow, the interest rate in the offer, the term, any origination fee as a percentage and any other lender fees in dollars. Then choose whether the fees are taken out of the loan, so you receive less cash than you borrow, or added to the balance, so you owe more. The calculator returns the APR, the monthly payment, the cash you actually receive and the total cost of the loan.
To compare two offers, fill in Offer B. Clear its rate box to hide the comparison. The table under the results shows what the APR becomes if you repay the loan early, which the offer paperwork never shows. Nothing you type leaves your browser.
APR vs interest rate: an example
The interest rate is the price of the money you borrow. The APR is the yearly cost of the loan once certain fees are included, measured against the cash you actually get (CFPB: What is the difference between a loan interest rate and the APR?). Take a $20,000 loan over 5 years at 8.50% with a 3% origination fee and a $100 document fee taken out of the loan. The fees are $700.00, so you receive $19,300.00, but you pay back the whole $20,000 at $410.33 a month.
Because you pay interest on money you never received, the APR is 10.03%, 1.53 points above the stated rate. Without the fees, the APR on the same loan would equal the rate, 8.50%.
Which fees count toward the APR
Under Regulation Z the APR is built on the finance charge, which is any charge payable by the borrower and imposed by the lender as a condition of the credit (Regulation Z, 12 CFR 1026.4 (definition of finance charge)). Origination fees, discount points and similar lender charges count. Certain items are excluded: application fees charged to every applicant whether or not credit is granted, late and default charges, and, on loans secured by real estate, bona fide third-party costs such as appraisal, credit report and title fees.
That is why you should ask a lender which fees are included in the APR they quote, and enter everything the lender charges for making the loan, so you can see the cost with and without it. Costs that come later, such as late fees or optional add-ons you can decline, are not part of the figure.
How the calculator works out the APR
The payment on the full loan is L × r ÷ [1 − (1 + r)−n], where L is the principal, r is the rate ÷ 12 and n is the number of months. The APR is 12 times the monthly rate i at which the cash you receive equals the present value of those payments: cash = payment × [1 − (1 + i)−n] ÷ i. There is no formula for i, so the calculator searches for it until the two sides match. This is the actuarial method described in Regulation Z, 12 CFR 1026.22 (determination of the annual percentage rate), using equal monthly periods. Official disclosures use exact dates and any odd first period, so they can differ by a few hundredths of a point.
Fees taken out of the loan or added to it
In the example the fees came out of the proceeds. If the same $700.00 of fees were added to the balance instead, you would receive the full $20,000 but owe $20,700.00, the payment would be $424.69 and the APR 9.97%. The cost is similar either way, because in both cases you pay interest on the fees. A fee you pay in cash at closing works like a fee taken out of the loan.
Term matters too. Shortening the example loan to 3 years at the same rate and fees raises the payment to $631.35 and the APR to 10.94%, because the same fees are spread over fewer months of borrowing. The loan calculator shows the payment on any term, and the amortization calculator shows how each payment splits between interest and principal.
What happens to the APR if you pay off early
The APR on an offer assumes you keep the loan for the full term. If you repay sooner, the fees are charged against a shorter loan. On the example loan, repaying after 12 months means you actually pay 12.54%, after 24 months 10.82% and after 36 months 10.29%, against 10.03% for the full 5 years. The more of the cost that sits in up-front fees, the more it hurts to leave early. A loan with a lower fee but a slightly higher rate can be cheaper if you expect to repay within a couple of years, and a prepayment penalty would raise the cost further.
Comparing two offers by APR
A lower rate does not guarantee a cheaper loan. In the example, Offer A has the lower rate (8.50% against 9.00%), but after its fees its APR is 10.03% against 9.00% for Offer B, which has no fees. Offer B is the better deal on APR by 1.03 points, even though its monthly payment is $4.84 higher.
APR is designed for exactly this comparison, but it works best between loans with the same term. When the terms differ, also compare the total interest and fees, and the monthly payment you can afford.
Where APR falls short
Credit card APR is simply the stated yearly rate and does not include fees such as an annual fee, so it is not comparable with an installment-loan APR. Adjustable-rate loans quote an APR that assumes the rate stays where it starts. For reference, the Federal Reserve (Federal Reserve G.19 Consumer Credit) put the average rate on credit card accounts paying interest at 22.36% and on 24-month personal loans at 11.90% at commercial banks in August 2026. Your own offer depends on your credit.
For a personal loan with an extra payment option, try the personal loan calculator. If you are weighing one loan against several debts, see the debt consolidation calculator. To see what a rate costs without fees, use the interest calculator.
Updated November 3, 2026 · Sources are linked in the text above · How we build and check our calculators