APR Calculator
Calculate Annual Percentage Rate (APR) including all fees and compounding effects
Loan Specification
Principal amount you receive
Nominal annual interest rate
Full years of loan term
Extra months (0-11)
How often you make payments
How often interest compounds
Additional Fees
Fees added to principal (interest charged on these)
Upfront fees (no interest charged but affects APR)
Main Results
Key Differences
EAR: Interest rate with compounding, no fees
APR: Includes all fees, no compounding effect
Effective APR: True cost with fees and compounding
Example Calculation
30-Year Mortgage Example
Loan Amount: $200,000
Interest Rate: 6% annual
Loan Term: 30 years
Fees Rolled In: $5,000
Payment Frequency: Monthly
Compounding: Monthly
Results
Monthly Payment: $1,229.08
APR: 6.232%
Effective APR: 6.413%
Total Finance Charge: $247,268.80
Interest Rate Types
Nominal Rate
Basic quoted interest rate
EAR
Includes compounding effect
APR
Includes fees, no compounding
Effective APR
True cost with fees & compounding
APR Tips
Use APR to compare different loan offers
Effective APR shows the true borrowing cost
Lower APR means lower total cost
Consider all fees when comparing loans
Understanding Annual Percentage Rate (APR)
What is APR?
APR (Annual Percentage Rate) represents the true yearly cost of borrowing money, including both the interest rate and all additional fees. It provides a standardized way to compare different loan offers.
Why APR Matters
- •Reveals the total cost of borrowing
- •Includes all fees and charges
- •Enables accurate loan comparison
- •Required disclosure by law
APR Calculation Components
APR includes: Interest + Fees + Compounding
- Base Interest Rate: The nominal annual rate
- Fees Rolled In: Added to principal, interest charged
- Fees Paid Separately: Upfront costs, affects APR
- Compounding Effect: Interest on interest
Good APR Benchmarks
Credit Cards: Below 18% is good
Personal Loans: 6-12% is typical
Mortgages: 3-7% depending on market
Auto Loans: 3-8% for good credit