APR (Annual Percentage Rate) represents the true yearly cost of borrowing, including interest plus fees. It is often higher than the stated interest rate. Compare loans using APR, not just the headline interest rate, for an accurate cost comparison.
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📈 APR Calculator
Calculate the true APR of a loan including fees. Compare loan offers accurately by seeing the real annual cost, not just the headline interest rate.
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✅ Trusted Tool
Simplified APR estimate. For precise legal APR disclosure, refer to your lender's official documentation. Free for financial comparison. No sign-up needed.
🤔 How Does This Work?
Spreads upfront fees across the loan term as an effective rate addition
APR ≈ Stated Rate + (Fees / Loan Amount / Term Years × 100)
❓ Frequently Asked Questions
Why is APR different from interest rate?▼
Interest rate is just the cost of borrowing the principal. APR includes interest PLUS additional fees (origination fees, processing fees, insurance) spread over the loan term, giving the true annual cost. Always compare APR, not just interest rate, between lenders.
How much can fees affect APR?▼
Significantly on shorter loans. A 1-year loan with 25,000 in fees on a 1,000,000 loan adds about 2.5% to the effective rate. On a 20-year mortgage, the same fee has minimal annual impact since it is spread over more years.
Interest rate is just the cost of borrowing the principal. APR includes interest PLUS additional fees (origination fees, processing fees, insurance) spread over the loan term, giving the true annual cost. Always compare APR, not just interest rate, between lenders.
How much can fees affect APR?▼
Significantly on shorter loans. A 1-year loan with 25,000 in fees on a 1,000,000 loan adds about 2.5% to the effective rate. On a 20-year mortgage, the same fee has minimal annual impact since it is spread over more years.