APR Calculator
The lender's quoted rate is often not the APR. Fees pull the true cost higher — this calculator finds it.
Effective rates
True APR (including fees)
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Nominal (stated) rate
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Cash to borrower
$0
Total fees
$0
Total interest
$0
Total cost
$0
Why APR isn't the interest rate
The interest rate measures the cost of borrowing the principal. APR adds upfront fees and amortizes them across the loan's life — so it's the all-in annualized cost.
Example: a $200,000 loan at 6.5% with $3,000 in fees has a 6.5% interest rate but a ~6.64% APR. You borrowed $200,000 on paper, but only $197,000 actually landed in your account. The "interest" of borrowing $197,000 to pay back $200k+ over 30 years is, on net, slightly higher than 6.5%.
Why Truth-in-Lending requires APR
Before 1968, lenders could advertise misleadingly low rates while burying fees. The Truth in Lending Act forced APR disclosure precisely so borrowers could compare apples to apples. Two loans at the "same rate" can have very different APRs.
When to weigh APR more
The longer you hold the loan, the less the upfront fees matter (they amortize over more months). If you'll refinance or sell within a few years, fees matter more than the rate — look at total dollars out the door.