APR Calculator (Annual Percentage Rate)
Discover the true annual cost of your loan, including fees.
Loan Details
Your Annual Percentage Rate (APR)
0.000%
Monthly Payment
$0.00
Total Cost (Interest + Fees)
$0.00
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APR vs. Interest Rate: Understanding the True Cost of Your Loan
What is the Difference?
When you’re shopping for a loan, you’ll see two key percentages: the interest rate and the Annual Percentage Rate (APR). It’s crucial to understand the difference.
- Interest Rate: This is simply the cost of borrowing the principal loan amount. It does not include any fees or other charges associated with the loan.
- Annual Percentage Rate (APR): This is a broader measure of the loan’s cost. The APR includes the interest rate PLUS other charges and fees, such as origination fees, closing costs, and mortgage insurance.
Because it includes these extra costs, the APR is a more accurate representation of the true annual cost of your loan. Our APR Calculator is designed to show you this important number.
Why is the APR Important for Comparing Loans?
The APR is the single most important tool for comparing different loan offers. One lender might offer a very low interest rate but charge high fees, while another might have a slightly higher rate but no fees. Looking only at the interest rate would be misleading. The APR levels the playing field, giving you one number to compare the true cost of each loan. The loan with the lower APR is the more affordable option.
How to Use This APR Calculator
Our APR Calculator makes it easy to find the true cost of your loan. Simply enter the loan amount, the stated interest rate, the loan term, and the total of any upfront fees. The calculator will instantly show you the APR, giving you the information you need to make a smarter financial decision.