APR calculator: what a loan really costs once fees are included
Two personal loan offers can look easy to compare: one at 12%, one at 13%. But if the 12% loan takes a $750 origination fee out of the money you receive, you’re paying interest on money you never get. The annual percentage rate, or APR, folds those fees into one yearly rate, so you can compare offers on equal terms.
APR calculator
- APR
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- Monthly payment
- –
- Money you receive
- –
- Total cost of borrowing
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APR spreads upfront fees over the life of the loan, so you can compare loans with different rates and fees on one number. It assumes you keep the loan for its full term; if you repay early, the fees weigh more heavily. Payments are fixed and monthly. The APR on your lender’s disclosure follows federal Truth in Lending rules and is the authoritative figure. Everything here runs in your browser; nothing you enter is stored or sent.
What this calculator can help you understand
- A loan’s APR, with upfront fees included.
- How much money you’d actually receive.
- The total cost of borrowing, including fees and interest.
When it’s useful
- When comparing personal loan offers with different rates and fees.
- When a lender deducts an origination fee from your loan.
- When deciding whether a lower rate with fees beats a higher rate without them.
Who it’s for
- Anyone comparing personal, auto or student loan offers.
- People consolidating debt who want the real cost of the new loan.
What to enter
| Input | What it means | Where to find it |
|---|---|---|
| Loan amount | The amount you’ll repay, before any fees are taken out | The loan offer |
| Interest rate | The yearly interest rate | The loan offer |
| Term in months | How long you have to repay | The loan offer |
| Upfront fees | Origination and other finance charges | The offer or its disclosure |
How to use it
- Enter the loan amount, rate and term from an offer.
- Enter any upfront fees.
- Read the APR and the money you’d actually receive.
- Repeat for each offer, using the same term where you can.
Understanding your results
- Monthly payment is based on the full loan amount and the interest rate.
- Money you receive = loan amount − upfront fees.
- APR is the rate at which that payment would repay only the money you receive.
- Total cost of borrowing = all payments − money you receive.
A worked example
Suppose you’re offered $15,000 for 36 months at 12%, with a 5% origination fee of $750 taken from the loan. Another lender offers 13% with no fee.
- The 12% loan: payments of $498.21 a month, but you receive $14,250. Its APR is 15.61%, and borrowing costs $3,686 in total.
- The 13% loan: payments of $505.41 a month, you receive the full $15,000, and borrowing costs $3,195.
- What it means: the loan with the lower interest rate is the more expensive one, once the fee is counted.
Common mistakes
- Comparing interest rates instead of APRs.
- Borrowing too little after fees. If you need $15,000 in hand, a fee taken from the loan means borrowing more.
- Comparing APRs across very different terms. A longer term can lower the APR and still cost more in total.
- Overlooking prepayment penalties or other fees not included in the APR.
What to do with your result
- Ask each lender for the APR, the fee and the amount you’ll actually receive.
- See the full payment schedule with the loan calculator.
- If you’re consolidating, compare the new loan with your current plan in the debt payoff calculator.
Limitations to keep in mind
The calculator treats every upfront fee as a finance charge and assumes fixed monthly payments for the full term. Official APRs follow Truth in Lending rules, which can treat some fees differently and use exact payment dates. Your lender’s disclosure is the authoritative figure. This isn’t financial or lending advice.
Frequently asked questions
What’s the difference between an interest rate and an APR?
The interest rate sets your payment. The APR also counts upfront finance charges, like origination fees, as a yearly rate. When there are no fees, the two are the same.
Which offer should I compare on?
Compare APRs for loans with the same term, along with the monthly payment and total cost. In our example, the 12% loan with a $750 fee has an APR of 15.61%, higher than a 13% loan with no fee.
Why does a longer term lower the APR?
The same fee is spread over more months. For our 12% loan with a $750 fee, the APR would be 14.28% over 60 months instead of 15.61% over 36, though you’d pay more interest overall.
Does APR matter if I repay early?
Yes. APR assumes you keep the loan for the full term. If you repay early, you’ve paid the full fee over a shorter time, so your real cost per year is higher than the stated APR.
Is a credit card’s APR the same thing?
For credit cards, APR is the yearly interest rate on balances; there’s usually no upfront fee built in. Fees like annual or balance transfer fees are disclosed separately.
Do lenders have to tell me the APR?
Yes. Under the federal Truth in Lending Act, lenders must disclose the APR on consumer loans before you sign, calculated by set rules.
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This calculator gives estimates for illustration, based on the figures you enter and the assumptions described on this page. It isn’t financial, tax or legal advice, an offer, or a guarantee of any outcome.