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APR Calculator

U.S. only tools

The advertised interest rate is not the cost of borrowing. Two lenders can quote 7% and 7% while one charges $0 in fees and the other charges 2 points and a $995 origination fee. The annual percentage rate (APR) folds those costs into a single number, which is exactly why regulators require it on loan disclosures.

APR Calculator - Danfio

https://danfio.com/tools/apr-calculator/ - printed from this page

Currency: USD ($) - display only, nothing was converted

$

The amount you are borrowing, before any fees are taken out.

The rate the lender quotes for the loan itself, before fees are added.

$

Origination fee, points, application and underwriting fees.

$

Ongoing charges added to each payment, such as required insurance products.

Results update as you type. Nothing leaves your device.

Currency symbol

Symbol only - nothing is converted and no exchange rate is used. Figures quoted in the explanation text stay as the sources publish them.

Annual percentage rate (APR)

9.744%

Stated rate 8% plus $800 of upfront fees over 60 payments.

Monthly payment
$405.53
Cash received
$19,200 loan $20,000 less fees
Total interest
$4,331.67
Total cost of credit
$5,131.67

Where the extra cost comes from

APR uplift over stated rate
+174 basis points
Fees as % of the loan
4%
Interest + fees per $100 borrowed
$25.66
Total repaid
$25,131.67

Offer summary

ItemAmount
Loan amount financed$20,000
Stated interest rate8%
Monthly payment (principal & interest)$405.53
Upfront fees$800.00
Monthly fees$0.00
Total interest over the term$4,331.67
Effective APR9.744%
Total cost of credit$5,131.67

Total cost of credit = all interest plus every fee, which is the number to compare against another offer of the same length.

Fees add 174 basis points to this loan: you are paying 9.744% rather than the advertised 8%. Ask whether the fees can be reduced or whether a higher-rate, lower-fee offer costs less overall.

This calculator takes the loan amount, the stated rate, the term and the fees you pay up front, then solves for the rate that equates the payments with the cash you actually receive. Every figure is computed in your browser; nothing you type is uploaded.

About this apr calculator

Comparing two loan offers by their interest rates alone hides the charge that decides the cost. Origination fees, points and application charges shrink the cash a borrower actually receives while the scheduled payments stay the same, and the annual percentage rate is the single number that folds that gap back in.

Nothing here asks for an account: the calculator runs in the browser with no sign-up and no email. The APR it solves is the discount rate that equates the present value of every scheduled payment with the net amount advanced, found by bisection to within a fraction of a cent — the approach a spreadsheet RATE function uses.

Fees that exist only because you took the loan belong in the comparison, while an appraisal or title insurance generally does not, and small timing differences move the printed figure. This is an estimate page rather than lending or investment advice. Keep the term equal and treat the disclosed APR as the binding number.

How this apr calculator works

What APR measures

The APR is the discount rate that makes the present value of every scheduled payment equal to the amount actually advanced to the borrower — the loan amount minus fees paid up front. That net amount is the cash you truly receive, and it is what the rate is solved against.

Because the same payments are discounted against a smaller cash amount, the solved rate is higher than the stated rate. The larger the upfront fee, the wider the gap, which is why two lenders quoting the same interest rate can have very different APRs.

Solving for the rate

There is no algebraic solution for the rate, so the calculator solves it numerically by bisection: it repeatedly narrows an interest range — doubling the upper bound when needed, down to one hundred percent a month — until the present value of the payments matches the net amount received, accurate to well under a basis point after 200 iterations.

This is the same approach used by spreadsheet RATE functions and lending software, which is why the result matches the APR printed on a Regulation Z disclosure. The monthly rate falls out of the present-value equation directly, so the answer is a number that would hold up against a bank\u2019s own software.

What belongs in the fee box

Include origination fees, discount points, application and underwriting fees, and any other charge that exists only because you took the loan. Each one shrinks the cash you actually receive while the scheduled payments stay the same, which is exactly the gap the APR exists to show.

Exclude third-party costs you would pay in cash regardless, such as a property appraisal or title insurance, unless your lender folds them into the disclosure. The exact treatment is what makes disclosed APRs differ slightly between lenders, so compare the printed figures rather than the quoted rates.

Ongoing monthly fees, and what the number assumes

Alongside the upfront charges, any ongoing monthly fee — insurance, a service or maintenance charge — is added into each payment of the discounted stream, so it raises the APR just like an up-front cost while leaving the nominal stated rate unchanged.

The APR assumes you hold the loan to its full term. If you may repay early or refinance, the upfront fees are spread over fewer payments in practice, so ask whether they are refundable and check for a prepayment penalty before treating the full-term APR as the whole story.

Two offers, one number at a time

Comparing offers means holding everything you can hold constant: the same amount, the same term, then the APR and the total cost of credit the table prints. A lower headline rate can lose that comparison - $20,000 over five years at 8% with $800 of fees solves to about 9.7% APR, while the same loan at 7.5% with $2,400 of fees solves to about 13.0%, because the larger fee is spread over the same sixty payments against a smaller net amount.

When the terms differ, convert them before comparing, or compare the total cost of credit instead of the rate, since that number already contains the difference: the 7.5% offer above costs about $1,314 more in fees and interest despite the cheaper rate. The monthly payment then answers the other question - whether the cheaper total is affordable - and the two answers are allowed to disagree, which is why this page prints both.

Worked examples

Each example below was run through the calculator on this page when the site was built, so the numbers match what you see when you enter the same inputs.

$20,000 loan with $800 of fees

Loan amount: $20,000.00 · Stated interest rate: 8% · Loan term: 5 years · Upfront fees paid at closing: $800.00 · Extra monthly fees: $0.00

Annual percentage rate (APR)

9.744%

Stated rate 8% plus $800 of upfront fees over 60 payments.

Monthly payment: $405.53 · Cash received: $19,200 · Total interest: $4,331.67 · Total cost of credit: $5,131.67

A modest fee still pushes the true cost noticeably above the quoted 8%.

Points on a mortgage-style loan

Loan amount: $300,000.00 · Stated interest rate: 6.25% · Loan term: 30 years · Upfront fees paid at closing: $6,000.00 · Extra monthly fees: $0.00

Annual percentage rate (APR)

6.442%

Stated rate 6.25% plus $6,000 of upfront fees over 360 payments.

Monthly payment: $1,847.15 · Cash received: $294,000 · Total interest: $364,974.58 · Total cost of credit: $370,974.58

Two points on a long loan look small per month but show up clearly in the APR.

Short loan with heavy fees

Loan amount: $8,000.00 · Stated interest rate: 12% · Loan term: 2 years · Upfront fees paid at closing: $500.00 · Extra monthly fees: $10.00

Annual percentage rate (APR)

21.324%

Stated rate 12% plus $500 of upfront fees over 24 payments.

Monthly payment: $386.59 · Cash received: $7,500 · Total interest: $1,038.11 · Total cost of credit: $1,778.11

On short loans, fees dominate the APR because there are few payments to spread them across.

Combined upfront and monthly fees on a 4-year loan

Loan amount: $25,000.00 · Stated interest rate: 7.5% · Loan term: 4 years · Upfront fees paid at closing: $1,000.00 · Extra monthly fees: $25.00

Annual percentage rate (APR)

11.784%

Stated rate 7.5% plus $1,000 of upfront fees over 48 payments.

Monthly payment: $629.47 · Cash received: $24,000 · Total interest: $4,014.68 · Total cost of credit: $6,214.68

A different fee mix: $1,000 up front plus $25 a month adds about $1,200 of monthly fees on its own, and together the fees lift the APR to about 11.8% from a stated 7.5% — the sort of offer where the fee box matters most.

Frequently asked questions

Why is the APR higher than the interest rate I was quoted?

Because the APR includes fees paid up front. You receive less cash than the loan amount but repay the full amount plus interest, so the effective rate is higher. The bigger the fee, the bigger the gap.

Which number should I use to compare loan offers?

Use the APR when comparing loans with different fee structures and the same term, because it captures both rate and costs. For loans you may repay early, also check whether fees are refundable and whether a prepayment penalty applies — APR assumes you hold the loan for the full term.

Does APR matter on a credit card?

Yes, but differently. Card APRs are quoted as an annual rate applied to a revolving balance, so there is no term to amortize. Compare card APRs directly and watch for penalty APRs that apply after a missed payment.

Should I pay discount points to lower my rate?

Points trade cash today for a lower rate tomorrow. Divide the points paid by the monthly saving to get the break-even month: if you keep the loan longer than that, points win. If you may sell or refinance sooner, keep the cash.

What is the difference between APR and APY?

APR measures the cost of borrowing using a nominal annual rate, ignoring compounding within the year. APY (or effective annual rate) includes compounding, so it is the right measure for savings accounts and the wrong one for comparing loans.

Why do disclosed APRs sometimes differ from this calculator?

Lenders follow specific disclosure rules about which fees count and how they are timed, and a few fees are excluded entirely. Small timing differences — such as whether the first payment is one month or 30 days after closing — also shift the result slightly.

Assumptions and sources

  • APR is defined as the rate that equates the present value of scheduled payments with the net amount advanced, following the US Truth in Lending Act (Regulation Z Appendix J) approach.
  • The rate is found by solving the present-value equation, which is accurate to well under a basis point.
  • Which fees count and how they are timed follows the fee treatments your loan estimate and the lender disclosure rules actually apply; treat the printed disclosure as the binding figure.

Last reviewed 2026-09-13. An estimate, not financial advice; your lender's Loan Estimate overrides it. Read the full disclaimer.

Where a figure on this page comes from an official agency — HUD, IRS, FICO or a state body — the site keeps a dated snapshot of the source page in its sources library, and a scheduled job re-checks that snapshot, so the number can be traced back to the document it came from.

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