About the APR Calculator
APR (annual percentage rate) folds a loan's upfront fees into a single annualized cost, so it's higher than the stated "note" rate whenever there are fees or points. Because it captures the full cost, APR is the fairest way to compare loan offers.
How it’s calculated
Payments are computed on the full loan at the note rate. The APR is the rate that makes those payments equal the net amount you actually receive (loan minus fees), annualized.
Example calculation
A $20,000 loan at a 6.5% note rate over 5 years with $500 in fees works out to an APR of about 7.1%.
Frequently asked questions
Why compare by APR instead of interest rate?
Two loans with the same rate can cost very different amounts if one has higher fees. APR includes those fees, so it reflects the true cost and makes offers comparable.
When does APR equal the interest rate?
When there are no upfront fees or points. With zero fees, the APR and the note rate are the same.
This calculator provides estimates for educational purposes and should not be considered financial, tax, or legal advice. Your actual figures may vary with lender terms, fees, and market conditions.