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APR Calculator
Use this free APR Calculator to calculate the Annual Percentage Rate of your loan. Simple, accurate, and easy to use for loan comparison.
The Annual Percentage Rate (APR) Calculator helps you understand the true cost of borrowing. Unlike the nominal interest rate, APR includes both the interest rate and any associated fees (like origination fees), expressed as a yearly percentage.
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INPUT VALUES
When to Use This Calculator
Use this calculator to:
- Compare Loans: A loan with a lower interest rate might have a higher APR if the fees are high. APR is the best apples-to-apples comparison tool.
- Understand True Cost: See how much extra you are really paying for a loan when fees are included.
Example Scenario
Formula Breakdown:
1. Add Interest & Fees: Sum up the total interest and any upfront fees.
2. Divide by Principal: Divide that sum by the initial loan amount.
3. Divide by Days: Divide the result by the total number of days in the loan term.
4. Annualize & Convert: Multiply by 365 (days in a year) and then by 100 to get the percentage.
Step-by-Step Example:
- Loan Principal: $160,000
- Total Interest: $25,000
- Fees: $5,000
- Term: 2 Years (730 Days)
Calculation:
- Total Cost: $25,000 + $5,000 = $30,000.
- Cost/Principal: $30,000 / $160,000 = 0.1875.
- Daily Rate: 0.1875 / 730 = 0.0002568...
- APR: 0.0002568... × 365 × 100 = 9.375%.