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APR Calculator

By Calxy · Updated · Calculation methodology

Compare the true cost of equal-payment loans after including financing fees, whether they are paid upfront or rolled into the loan, with every step shown.

Printed from Calxy · https://www.calxy.net/financial/apr-calculator

Estimated loan APR7.5629%
USD

0.01 – 10,000,000,000 USD

USD

0 – 10,000,000,000 USD

%

0 – 100 %

years

1 – 50 years

Estimated loan APR

7.5629%

  • Net proceeds$19,500.00
  • Monthly payment$391.32
  • Total finance charge$3,979.38

Equal monthly payments; fees paid upfront or added to the balance. This is not an official disclosure calculation for irregular dates, mortgage insurance or variable rates.

How this was calculated

  1. Net proceeds = loan amount − upfront feesPut in your numbers: $20,000.00 − $500.00Answer: Net proceeds $19,500.00
  2. Payment = B × r(1 + r)^n ÷ ((1 + r)^n − 1), r = note rate ÷ 12Put in your numbers: $20,000.00, r = 6.5% ÷ 12 = 0.00541667, n = 60Answer: $391.32 a month
  3. Solve for the monthly rate i: payment × (1 − (1 + i)^−n) ÷ i = net proceedsPut in your numbers: $391.32 × (1 − (1 + i)^−60) ÷ i = $19,500.00Answer: i = 0.00630240 (0.630240% a month)
  4. APR = i × 12 × 100Put in your numbers: 0.00630240 × 12 × 100Answer: 7.5629%
  5. Total finance charge = payment × n − net proceedsPut in your numbers: $391.32 × 60 − $19,500.00 = $23,479.38 − $19,500.00Answer: $3,979.38interest plus the fees

How apr is calculated

Find the monthly discount rate at which the present value of the scheduled payments equals net loan proceeds. Multiply that monthly rate by twelve for nominal annual APR; this differs from an effective annual yield.

Worked example

A $20,000 loan at 6.5% with no fees has a modeled APR of 6.5%. With upfront financing fees, the same payments repay smaller net proceeds, so the modeled APR rises.

At 6% for five years with $500 of fees paid upfront, the $386.66 payment repays net proceeds of $19,500. Solving $386.66 × (1 − (1 + i)^−60) ÷ i = $19,500 gives i ≈ 0.588% a month, an APR of about 7.058%, and a total finance charge of $3,699.36.

Frequently asked questions

What if the fees are financed into the loan instead of paid upfront?

Then the fees are added to the balance and you receive the full loan amount. $20,000 at 6% for five years with $500 financed has a $396.32 payment and a 7.0316% APR, against 7.0579% when the $500 is paid upfront. Both show the total finance charge: payments minus net proceeds.

Is this the APR my lender must disclose?

Not necessarily. This model assumes equal monthly periods and upfront fees. Official disclosures may include other charges, insurance, irregular dates and legally specified tolerances.

References

Last updated . Results are estimates for informational purposes only.