This APR calculator reveals the true annual cost of a loan by folding upfront fees into the effective rate.
Finance
APR Calculator
Include upfront fees in cash flows to calculate the real annual percentage rate.
Calculator
About this calculator
Formula notes
Solve the rate that makes discounted cash flows match the net amount received: fees reduce what you actually get, raising the effective APR above the nominal rate.
Worked examples
- Example: borrowing 100000 with 2000 fees at 5% nominal for 3 years gives an APR ≈ 6.354% and total finance cost ≈ 9895.
- Borrowing $10,000 for 3 years at a 7% note rate with a $300 upfront fee produces an APR above 7% because the usable proceeds are only $9,700.
How to use it
- Enter the loan amount and upfront fees.
- Enter the nominal rate and term.
- Read the effective APR and total finance cost.
Frequently asked questions
Why is APR higher than the nominal rate?
Fees shrink the cash you receive while payments stay the same, so the true rate rises.
Does APR include compounding frequency?
Yes, the effective APR reflects the actual payment schedule built into the cash flows.
Limits and interpretation
- APR depends on the exact cash-flow timing and fee treatment; lender disclosures may include or exclude charges under jurisdiction-specific rules.
- A fixed APR comparison does not show prepayment penalties, variable-rate resets, late fees, or differences in payment flexibility.