APR Calculator: Annual Percentage Rate With Fees & Points
Calculate the annual percentage rate (APR) of a loan, which folds upfront fees into the interest rate so you can compare offers fairly. Enter the loan amount, interest rate, term and fees. Example: a $200,000, 30-year loan at 6.5% with $4,000 in fees has an APR of about 6.7%.
Origination, points, underwriting, etc. that you pay to get the loan.
Show steps
How to use the APR Calculator
- Enter the loan amount, the stated interest rate and the term.
- Add all upfront lender fees and discount points.
- Press Calculate to see the APR and the true cost of the loan.
Formula and method
APR is the rate r that solves Amount received = M × (1 − (1 + r)−n) / r, where M is the payment calculated on the full loan at the note rate and the amount received is the loan minus upfront fees. With no fees, APR equals the interest rate.
Frequently asked questions
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR adds certain fees and expresses the total cost as a yearly rate, so it is usually higher.
Which fees go into APR?
Lender charges such as origination fees and discount points. Costs like appraisal and title are often excluded by the official rules, so use the fees you consider part of getting the loan.
Is a lower APR always better?
Usually, if you keep the loan for its full term. If you sell or refinance early, upfront fees weigh more heavily, so compare the break-even point too.
Sources
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