APR calculator
Enter the loan amount, interest rate and term, plus any upfront and monthly fees. The calculator returns the annual percentage rate (APR) as US lenders disclose it, the effective annual rate used for the UK/EU APR, the monthly payment and the total cost of credit. Add-on (flat) rates are converted too.
Source: 12 CFR 1026 App. J, CFPB – Regulation Z, Appendix J: Annual Percentage Rate Computations for Closed-End Credit Transactions. Updated: .
How it is calculated
How APR is calculated
The APR is the interest rate at which the present value of all your payments equals the money you actually receive. Fees that reduce the payout – an origination fee, points or required insurance – therefore raise the APR above the note rate.
- Work out the monthly payment from the loan amount (plus any financed fees), rate and term.
- Find the monthly rate j at which amount received = payment × (1 − (1 + j)−n) ÷ j. The calculator solves this exactly by bisection – the same "iteration procedure" that Regulation Z describes.
- US APR = 12 × j (Regulation Z, Appendix J: unit-period rate × unit periods per year). UK/EU APR = (1 + j)12 − 1 (FCA CONC App 1.2, EU Consumer Credit Directive).
Example: $10,000 at 6% for 36 months
| Fees | You receive | Monthly payment | US APR | UK/EU APR |
|---|---|---|---|---|
| none | 10,000.00 | 304.22 | 6.00% | 6.17% |
| 2% origination fee (200 deducted) | 9,800.00 | 304.22 | 7.36% | 7.62% |
| 200 fee financed | 10,000.00 | 310.30 | 7.33% | 7.59% |
With no fees the US APR equals the interest rate. The UK/EU figure is always a little higher because it compounds the monthly rate over the year – so a UK "representative APR" and a US APR for the same loan are not directly comparable.
Add-on (flat) interest
Some car dealers and installment lenders charge interest on the original amount for the whole term. 5% add-on over 36 months looks cheap but equals an APR of about 9.3%, because you keep paying interest on money you have already repaid. Choose "on the original amount" to convert it.
In Excel: =RATE(36,-304.22,9800)*12 gives the US APR (7.36%); =EFFECT(RATE(36,-304.22,9800)*12,12) gives the UK/EU APR (7.62%).
Limits
The calculator assumes equal monthly payments at the end of each month and one payout at the start. Mortgage APRs in the US also count certain closing costs; which ones is set out in Regulation Z (12 CFR 1026.4). Credit card APRs are quoted directly by the issuer and are not what this tool computes.
Frequently asked questions
How do you calculate APR on a loan?
Find the monthly rate at which all payments, discounted back, equal the amount you receive, then multiply by 12 (US) or compound it with (1 + j)12 − 1 (UK/EU). $10,000 at 6% for 36 months with a $200 fee deducted gives 7.36% US APR.
What is the difference between interest rate and APR?
The interest rate only prices the money you borrow. The APR adds the fees you must pay to get the loan, spread over the term, so it shows the true yearly cost. Without fees, the US APR equals the interest rate.
How do I calculate APR from the interest rate?
Without fees: US APR = interest rate; UK/EU APR = (1 + rate ÷ 12)12 − 1, e.g. 6% becomes 6.17%. With fees you need the payment and the amount received – enter both in the calculator.
What is a good APR for a personal loan?
It depends on your credit score and the market rate at the time. Compare offers by APR for the same term and amount – the lowest APR is the cheapest loan, fees included.
How do I calculate APR in Excel?
Use =RATE(term,-payment,amount_received)*12 for the US APR, e.g. =RATE(36,-304.22,9800)*12 = 7.36%. Wrap it in =EFFECT(…,12) for the UK/EU APR.
Sources and legal basis
- 12 CFR 1026 App. J: CFPB – Regulation Z, Appendix J: Annual Percentage Rate Computations for Closed-End Credit Transactions
- CONC App 1.2: FCA Handbook – CONC App 1.2: Total charge for credit and APR (formula)
As of:
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