💸 APR Calculator
The APR is the yearly rate that makes the present value of all your payments equal the amount you borrowed. Lenders quote it by law so loans can be compared, and this calculator reverse-engineers it from any fixed-payment loan using bisection search.
Fees rolled into the loan raise the true APR above the quoted note rate, which is why two loans with the same rate can have different APRs.
How to use this calculator
Enter the loan amount, the fixed monthly payment and the number of payments to solve the true annual percentage rate.
- Type the Loan amount you received.
- Enter the fixed Monthly payment.
- Set the Number of payments.
- Press Calculate to reveal the APR the payments imply.
Frequently asked questions
What is APR?
The annual percentage rate is the yearly cost of borrowing expressed as a single rate, so loans with different fees and terms can be compared fairly.
How does the calculator find the rate?
No simple formula solves it directly, so the calculator brackets the answer and halves the interval eighty times (bisection) until the payment implied by the rate matches your payment.
Can you give an example?
Borrowing $20,000 with payments of $386.66 for 60 months implies an APR of about 6.00%. The total repaid is $23,199.60, so $3,199.60 is interest.
Why is APR higher than the quoted rate sometimes?
Fees financed into the loan raise the true yearly cost above the note rate. Comparing APRs instead of note rates exposes that difference.