Find the effective annual percentage rate of a loan once upfront fees and points are included.
How apr is worked out
The APR reflects the true cost of a loan by folding in upfront fees, so two loans with the same headline rate but different fees can be compared fairly. Enter the loan, rate, term and fees.
The calculator solves for the rate that matches the payments to the amount you actually receive after fees.
Worked example
The calculator opens with a loan amount of 200,000, upfront fees / points of 4,000. On those figures the APR is 6.189%. Underneath, Monthly payment comes out at $1,199.1 and Nominal rate at 6%. Change any field and every figure updates as you type.
How to use it
- Enter the loan amount, nominal rate and term.
- Enter the upfront fees or points.
- Read the APR.
The calculation
APR = the rate where the payment stream
equals (loan amount − fees), solved numerically
Common questions
What’s the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal; the APR also includes fees, so it’s usually higher and better for comparisons.
Why is APR higher than my rate?
Because upfront fees are spread across the loan as if they were extra interest, raising the effective rate.
Is APR the best comparison?
It’s a good standard comparison, though it assumes you keep the loan for the full term. This is an estimate, not advice.