APR Calculator
Estimate the APR impact of upfront loan fees.
APR helps compare U.S. loan offers beyond the stated note rate.
Enter loan amount, note rate, fees, and repayment term.
The result approximates the annualized cost of borrowing.
APR is estimated by comparing the scheduled payment with the amount you effectively receive after upfront fees.
About this calculator
What it estimates
- Enter loan amount, interest rate, fees, and term
- See estimated APR
- Compare with other loan offers
Important notes
- Calculates the payment at the note rate and estimates APR against net proceeds.
- Useful for comparing offers with different origination or closing fees.
- Official APR disclosures can use lender-specific timing and finance-charge rules.
How this calculator estimates the result
The calculator first computes the scheduled monthly payment at the note interest rate over the requested term using the standard amortizing-loan formula. It then treats the financed fees as reducing the actual cash you receive (net proceeds = loan amount − upfront fees) and solves numerically for the periodic rate that makes the present value of those same monthly payments equal to the net proceeds. Multiplying that periodic rate by 12 gives the estimated APR.
Assumptions baked in
- Fixed note rate with equal monthly payments.
- All listed fees are paid upfront and treated as finance charges.
- No prepayment, late fees, or rate changes during the term.
- Net proceeds = loan amount − fees (a common simplification for closed-end loans).
What this calculator does not do
- Does not separately model points, escrow, mortgage insurance, or per-diem interest the way a Loan Estimate does.
- Open-end credit (credit cards, HELOCs) uses a different APR definition and is not modeled here.
- Does not apply Regulation Z's finance-charge classification rules; some real-world fees are excluded from APR.
- Variable-rate, balloon, and interest-only loans are not supported.
A step-by-step example
Scenario: $20,000 loan, 7.00% note rate, 60-month term, $600 origination fee.
- Monthly payment at 7.00% over 60 months ≈ $396.02.
- Net proceeds = $20,000 − $600 = $19,400.
- Solve for the periodic rate r such that the present value of 60 payments of $396.02 equals $19,400.
- Numerical solution gives r ≈ 0.6504% per month.
Result: Estimated APR ≈ 7.80%. The 0.80 percentage-point gap between APR and note rate reflects the $600 fee spread over 5 years.
Official references
- CFPB – What is APR?
- CFPB – Truth in Lending Act (Regulation Z)
- Federal Reserve – Consumer Credit Protection
Sources open in a new tab. Numbers in formulas and brackets above reflect the most recent publicly available values at the time of writing and are reviewed periodically by the TDL Expert Panel.