💰 APR Calculator
Calculate annual percentage rate (APR)
How to Use This Calculator
Enter Principal Amount
Input the loan principal amount (the amount you're borrowing). This is the base amount before interest and fees.
Enter Total Interest
Enter the total interest you'll pay over the life of the loan. This is the cost of borrowing money.
Enter Fees (Optional)
Enter any additional fees associated with the loan (origination fees, processing fees, etc.). APR includes both interest and fees.
Enter Loan Term
Enter the loan term in days. For annual loans, use 365 days. APR annualizes the cost based on the loan term.
Formula
APR = ((Total Interest + Total Fees) / Principal / Loan Term in Days) × 365 × 100
Where:
• Total Interest = Interest paid over loan term
• Total Fees = All fees associated with the loan
• Principal = Loan amount
• Loan Term = Duration of loan in days
Example Calculation:
If principal is $10,000, total interest $500, fees $100, term 365 days:
• Total cost = $500 + $100 = $600
• APR = ($600 / $10,000 / 365) × 365 × 100
• APR = 0.06 × 100 = 6%
About APR Calculator
APR (Annual Percentage Rate) is a standardized way to express the total cost of borrowing money. Unlike the interest rate, which only shows the cost of the loan principal, APR includes both interest and fees, giving you a more complete picture of the true cost of a loan. APR makes it easier to compare different loan offers because it accounts for all costs in a single percentage. This calculator helps you calculate the APR for a loan based on the principal, total interest, fees, and loan term.
When to Use This Calculator
- Loan Comparison: Compare APR across different loan offers
- True Cost: Understand the true cost of borrowing including fees
- Financial Planning: Plan for loan costs in your budget
- Decision Making: Make informed decisions about loans
APR vs. Interest Rate
- Interest Rate: Only the cost of borrowing the principal
- APR: Includes interest + fees, giving total cost
- APR is Higher: APR is always equal to or higher than the interest rate
- Comparison Tool: Use APR to compare loans with different fee structures
Why Use Our Calculator?
- ✅ True Cost: See the total cost including fees
- ✅ Loan Comparison: Compare different loan offers accurately
- ✅ Easy Calculation: Simple APR calculation
- ✅ Financial Planning: Understand actual borrowing costs
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is APR?
APR (Annual Percentage Rate) is the annualized cost of borrowing money, including both interest and fees. It's expressed as a percentage and provides a standardized way to compare the true cost of different loans.
Why is APR higher than the interest rate?
APR includes fees in addition to interest, so it's always equal to or higher than the interest rate. For example, if the interest rate is 5% but there are origination fees, the APR might be 5.5% to account for those fees.
What fees are included in APR?
APR typically includes: origination fees, processing fees, underwriting fees, and other upfront fees. It does not include fees you can avoid (like late payment fees) or optional services (like credit insurance).
Should I compare interest rates or APR?
Compare APR when choosing between loans, as it shows the true cost including fees. However, also consider other factors like loan terms, prepayment penalties, and lender reputation. The interest rate is still important for understanding your monthly payment amount.