Financial Tool

APR Calculator

Find the true cost of your loan. Calculate Annual Percentage Rate (APR) by accounting for closing costs, fees, and points.

Loan Amount ($)

Stated Interest Rate (%)

Loan Term (Years)

Total Fees / Points ($)

Σ The Formula

APR = Effective Rate including Fees

Real World Examples

Mortgage Example

$200,000 loan at 6.0% with $5,000 in fees → APR = 6.34%

High-Fee Loan

$10,000 loan at 10% with $500 fee → APR = 13.59%

Refinancing

Compare a 5.5% rate with no fees vs. 5.0% rate with $4,000 fees.

# About This Calculator

The APR Calculator (Annual Percentage Rate) reveals the hidden costs of borrowing. Lenders often advertise a low interest rate but charge "origination fees" or "points" upfront. APR combines the interest rate and these fees into a single percentage, allowing you to compare loans "apples to apples."

APR vs. Interest Rate

Interest Rate

The base cost of borrowing money. This determines your monthly payment.

APR

The "effective" cost. It includes the interest rate PLUS broker fees, points, and other closing costs spread over the loan term.

Why is APR higher?

Because you pay fees upfront, you are effectively receiving *less* money than the loan amount, but you still pay interest on the full amount. This effectively raises the interest rate. The higher the fees, the higher the APR compared to the base rate.

Real-World Use Cases

Comparison Shopping: Lender A offers 5.5% with no fees. Lender B offers 5.0% with $5,000 fees. APR does the math to tell you which deal is actually mathematically better over the full term.

Truth in Lending: The US Truth in Lending Act requires lenders to disclose APR so they can't hide massive fees behind a "low" interest rate.

How To Use

Enter the **Loan Amount** (The amount you are borrowing).
Enter the **Interest Rate** (The advertised rate).
Enter the **Loan Term** in years.
Enter **Total Fees** (Closing costs, points, origination fees).
Click **Calculate APR** to see the effective rate.

Frequently Asked Questions

How is APR different from interest rate?+

Interest rate is the cost you pay each year to borrow the money, expressed as a percentage. APR is the cost you pay for the loan each year *inclusive of fees*.

Which one should I look at when comparing loans?+

Look at the APR. It gives you a more complete picture of the loan’s cost. However, if you plan to pay off the loan very early, the impact of upfront fees (included in APR) might be higher than the APR implies.

Why should I care about APR?+

It's the only way to compare two loans with different fee structures. Loan A might have a 5% rate and $5,000 fees. Loan B might have a 5.5% rate and $0 fees. APR reveals which one is actually cheaper.

Does APR affect my monthly payment?+

No. Your monthly payment is determined by the Interest Rate. APR is just a measuring tool to help you understand the *total cost* of the loan including fees.

Can APR be lower than the interest rate?+

Rarely. This only happens with 'negative points' or lender credits where the bank pays you to take the loan (usually in exchange for a higher interest rate).

Is APR Calculator free to use?+

Yes, APR Calculator on Matheric is completely free to use. We believe in accessible education and utility for everyone.