APR Calculator
Calculate the true Annual Percentage Rate (APR) of your loan including fees. Compare loan offers accurately with our free APR calculator.
Formula:Loan - Fees = Σ PMT / (1+APR/12)^t
APR Results
APR
6.695%
Annual Percentage Rate
Interest Rate
6.500%
Nominal rate
APR vs Rate Diff+0.195%
Monthly Payment$1,580
Total Interest$318,861
Total Cost$323,861
Loan Details
Enter loan amount and terms
$
%
115
years
$
APR vs Interest Rate
Compare nominal rate to true cost
Interest Rate
6.50%
Nominal rate
APR
6.70%
True cost of borrowing
The APR is 0.195% higher than the nominal interest rate. This difference represents the impact of $5,000 in fees spread over your 30-year loan.
Total Loan Cost Breakdown
Principal, interest, and fees
Principal
$250,000
Interest
$318,861
Fees
$5,000
Loan Summary
Complete cost breakdown
Loan Amount$250,000
Monthly Payment$1,580
Number of Payments360
Total of Payments$568,861
Total Interest Paid$318,861
Total Fees Paid$5,000
Total Cost of Loan$323,861
How APR is Calculated
Understand the formula
APR Definition:
APR is the rate that makes the present value of all monthly payments equal to the loan amount minus upfront fees. It's solved using iterative methods.
Present Value Equation:
Loan - Fees = Σ (Payment / (1 + APR/12)^t)
Where t = 1 to 360 (number of monthly payments)
Your Loan:
With $250,000 loan, 6.5% rate, and $5,000 in fees, your effective borrowing is $245,000, resulting in an APR of 6.695%.
Impact of Fees on APR
Compare different fee scenarios
| Fees | APR | Difference | Total Cost |
|---|---|---|---|
| $0 | 6.500% | +0.000% | $318,861 |
| $2,500 | 6.597% | +0.097% | $321,361 |
| $5,000 | 6.695% | +0.195% | $323,861 |
| $7,500 | 6.795% | +0.295% | $326,361 |
| $10,000 | 6.897% | +0.397% | $328,861 |
Base interest rate: 6.5% | Loan term: 30 years
What if you had different fees?
See how fees affect your true APR
$0$5,000$15,000
Your APR Insights
3 insights based on your inputs
Low Fee Impact
Your fees only add 0.20% to your rate—that's a reasonable fee structure.
Total Cost Perspective
You'll pay $323,861 in interest and fees—130% of the principal.
Consider Shorter Term
A 15-year term would have higher payments but save $176,863 in total cost.
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Frequently Asked Questions
APR is the total yearly cost of borrowing, including interest and fees, expressed as a percentage. Unlike the nominal interest rate, APR includes origination fees, closing costs, and other charges, giving a more accurate picture of the loan's true cost.
Interest rate is just the cost of borrowing the principal. APR includes the interest rate PLUS fees (origination, closing costs, etc.) spread over the loan term. APR is always equal to or higher than the interest rate. Use APR to compare loan offers.
APR typically includes: origination fees, discount points, mortgage insurance, closing costs, broker fees, and other lender charges. It usually excludes: title fees, appraisal fees, and other third-party costs. Requirements vary by lender and loan type.
A "good" APR depends on loan type, credit score, and market conditions. For mortgages: 6-7% (2024). Credit cards: under 15% is good. Auto loans: under 5% is excellent. Always compare APRs from multiple lenders to find the best rate.
Not always. Consider: loan term (shorter terms have lower total cost), your break-even point (if refinancing), prepayment penalties, and loan flexibility. A slightly higher APR with no prepayment penalty might be better if you plan to pay off early.
How this works
APR is the nominal annual rate; APY (also shown) accounts for compounding: APY = (1 + APR/n)^n − 1. When comparing loans, compare APR-to-APR — lenders are required to disclose APR in the US per the Truth in Lending Act.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Joseph OrdunaFounder & Software Engineer
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).
APR Results
APR
6.695%
Annual Percentage Rate
Interest Rate
6.500%
Nominal rate
APR vs Rate Diff+0.195%
Monthly Payment$1,580
Total Interest$318,861
Total Cost$323,861