APR Calculator
Estimate loan APR from equal monthly payments and upfront fees. Compare the nominal rate, estimated APR and total interest plus fees.
Read the GuideBefore you calculate
Assumes equal monthly payments and fees deducted from proceeds. It is an estimate, not a legally compliant APR disclosure for every loan type.
APR vs. Nominal Interest Rate
The nominal rate is the stated interest rate on a loan. APR (Annual Percentage Rate) is a broader measure that includes fees spread over the loan's life, expressed as an annualized rate. Under TILA (Truth in Lending Act), lenders must disclose APR so borrowers can compare offers fairly.
APR = IRR(cash flows) × 12 | Net Proceeds = Loan Amount − Fees | Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1]Example Scenarios
Low Rate, High Fees
A $20,000 loan at 4% nominal rate with $2,000 in origination fees over 36 months can have an APR over 7%. The advertised rate looks attractive, but fees significantly increase the true cost. Always compare APRs when shopping for loans.
Comparing Two Loan Offers
Lender A offers 5.5% with no fees. Lender B offers 4.9% with $500 in fees. On a $15,000/36-month loan, Lender B may actually have a higher APR despite the lower rate. APR is the only fair basis for comparison.
Methodology & Assumptions
A bracketed numerical search finds the monthly rate that discounts equal monthly payments to the loan proceeds after entered upfront fees. Multiplying by 12 gives an estimated nominal annual APR. It is not a regulatory disclosure: fee classifications, odd payment dates and lender rounding can differ.
Sources & calculation notes
Maintained by MoneyCalc. Results are estimates based on the inputs and assumptions shown, not personalized financial advice or a lender quote. Default rates are examples unless a specific tax year or official table is identified.
References explain the underlying concepts or rules. They do not endorse or independently certify this implementation.
Calculations run in your browser. Some tools retain settings on this device. Displayed rounding can produce small differences from a statement or contract.