APR calculator

$
%
years
$
The rate you actually pay
8.79%

1.29 points above the 7.50% quoted

A month$501
You receive$24,250
Total repaid$30,057
4%8%12%151015202530quoted 7.50%5 years: 8.79%4%8%12%1102030quoted 7.50%5 years: 8.79%

The same loan and the same fee at every term. A fee paid once is spread over however long you borrow, so the APR falls toward the quoted rate as the term lengthens and never quite reaches it.

Borrowing $25,000 at 7.50% over 5 years with $750 of fees gives an APR of 8.79%. The payment is $501 a month either way; the fee raises the rate by 1.29 points because it is repaid like principal but never reaches you.

How to use this, and the parts people get wrong
  • APR folds compulsory fees into the interest rate, which is why it runs higher than the advertised rate.
  • Enter fees once, as charged. The tool spreads them over the term for you.
  • Compare APR against APR. An APR against a flat monthly rate is not a comparison.

What the fee actually costs

You sign for $25,000, receive $24,250, and repay $30,057. Every lender quoting a rate without its fee is quoting the first number and hiding the third.

8.79%the rate you actually pay
1.29 pointsadded by the fee alone
$5,057the cost of the credit, over 5 years

The same loan at every term

What changing only the term does to the payment, the rate and the total.

YearsPaymentAPRTotal paid
1$2,16913.26%$26,027
2$1,12510.53%$27,000
3$7789.58%$27,996
4$6049.09%$29,015
5$5018.79%$30,057
7$3838.45%$32,210
10$2978.20%$35,611
15$2328.00%$41,716
20$2017.90%$48,336
25$1857.85%$55,424
30$1757.81%$62,929

Questions people ask

What is the difference between interest rate and APR?
The interest rate prices the loan. The APR prices the deal: it is the rate that makes the payments equal the money you actually received, so it carries the fees the interest rate leaves out. Here 7.50% becomes 8.79% once $750 of fees are counted.
Why does a shorter loan have a higher APR on the same fee?
Because the fee is paid once and spread over however long the loan runs. Over one year it lands on twelve payments; over thirty it lands on three hundred and sixty. The same fee therefore costs several points on a short loan and almost nothing on a long one, which is the shape the chart on this page draws.
Which fees belong in an APR?
The ones you pay to get the credit: origination, arrangement, broker and most closing costs. Charges you would pay anyway, or only if something goes wrong - late fees, insurance you choose separately - normally sit outside. Regulators differ on the edges, so this tool takes the total from you rather than guessing.
Is APR defined the same way in the US and the EU?
The mathematics is. Regulation Z in the United States and the Consumer Credit Directive in the European Union define it the same way: the rate that equates the present value of the payments to the net advance. What differs is which charges a lender must include, not how the rate is worked out.
Does a zero-fee loan have an APR above its rate?
No. With no fees the money you receive is the money you signed for, and the APR equals the quoted rate exactly. Set the fee to zero here and the two numbers meet.

Method and sources

  • 12 CFR 1026.22 (Regulation Z)APR as the rate equating payments to the net advance, United States
  • Directive 2008/48/EC, Annex IThe same equation, European Union
The calculation

The payment is the standard amortising formula on the full amount at the quoted rate. The APR is then the monthly rate that discounts those payments back to the amount net of fees, multiplied by twelve. That rate has no closed form, so it is solved by bisection over a bracket proven to contain it - two hundred halvings, exact far past any rate a lender quotes.

What these figures do not cover
  • Fees rolled into the balance rather than paid at signing behave differently; enter what you actually hand over.
  • Variable-rate loans have an APR that assumes the current rate holds, which it will not.
  • Which charges must be included is a matter of local law, so the fee total is taken from you rather than inferred from a country.

Last updated August 2026.

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