What is APR and how is it different from interest rate?

APR (Annual Percentage Rate) includes both the interest rate and additional fees associated with the loan, while the interest rate only reflects the cost of borrowing the principal amount. APR provides a more complete picture of the loan's true cost.

What fees are typically included in APR calculations?

Common fees include origination fees, application fees, processing fees, underwriting fees, mortgage broker fees, and discount points. However, some fees like appraisal fees, title insurance, and prepaid items are usually excluded.

Why is my APR higher than my interest rate?

APR is typically higher than the interest rate because it factors in additional fees and costs associated with the loan. The more fees involved, the greater the difference between APR and interest rate.

How does loan term affect APR?

Shorter loan terms generally result in higher APRs when fees are involved, because the upfront costs are spread over fewer payments. Longer terms tend to minimize the impact of fees on the APR.

💰 APR Calculator

Calculate the true cost of your loan including all fees

Compare loans accurately with Annual Percentage Rate calculation

Loan Details

Loan Amount ($)

Interest Rate (% per year)

Loan Term (years)

Total Fees ($)

Includes origination, processing, and other upfront fees

Results

Annual Percentage Rate (APR)

--%

Monthly Payment

$--

Total Payment

$--

Total Interest

$--

Fee Impact

+--% APR

Calculation Details

Interest Rate: --%

APR: --%

Fee Impact: --%

How to Use the APR Calculator

Basic Steps

Enter your loan amount and interest rate
Input the loan term in years
Add total upfront fees (origination, processing, etc.)
View your true APR and monthly payment
Compare different loan offers using APR

Understanding APR

APR vs Interest Rate: APR includes fees, interest rate doesn't
Lower APR: Better deal overall
Fee Impact: Shows how much fees add to your rate
Total Cost: Complete picture of loan expense

Frequently Asked Questions

Disclaimer

This calculator provides APR estimates for informational purposes only and does not constitute financial advice. Actual loan terms may vary based on creditworthiness, lender policies, and market conditions. Please consult with qualified financial professionals and verify all calculations with your lender before making financial decisions.