APR calculator
Enter the loan, the interest rate, the term and the fees paid at the start to see the APR. The fees are taken off the amount financed, so the APR comes out higher than the interest rate.
This answer is for the example values in the boxes above. $250,000.00 at 6% for 360 months (30 years), with $5,000.00 of fees paid at the start. Change the boxes to see your own answer.
The fees are taken off the loan to give the amount financed, and the APR is the yearly rate at which the payments are worth that amount. The payment follows from the interest rate on the whole loan.
How it works
The payment comes from the interest rate and the term, on the whole loan. The fees are paid at the start, so they are taken off the loan to give the amount financed. The APR is the yearly rate at which those payments are worth the amount financed.
Regulation Z says that the APR is the unit-period rate times the number of unit-periods in a year (Appendix J). For monthly payments the calculator finds the monthly rate and multiplies it by twelve. It shows the APR to three decimals.
A worked example
A loan of $250,000 at 6 percent for 30 years has a payment of $1,498.88. With $5,000 of fees paid at the start the amount financed is $245,000.00, and the same payments are worth that amount at a monthly rate that makes the APR 6.190 percent.
With no fees the APR is 6.000 percent, and with $10,000 of fees it is 6.385 percent. A loan of $300,000 at 6.5 percent for 15 years with $6,000 of fees has a payment of $2,613.32 and an APR of 6.822 percent.
What counts as a fee
Regulation Z defines the finance charge as the cost of consumer credit as a dollar amount. Points, loan fees, assumption fees and finder’s fees count, and so do appraisal, investigation and credit report fees, except for the charges that the rule excludes. The calculator takes the fees that you enter and does not decide which of them count. Your lender can tell you what it counted.
What it leaves out
The calculator covers a loan with equal monthly payments and fees paid at the start. It does not cover a rate that changes, uneven payments, a loan paid out in several advances, or a final payment larger than the others. A fee so large that the APR would be above 1,200 percent is refused with a message.
Sources
- Regulation Z, 12 CFR § 1026.22, determination of the annual percentage rate, read on 2026-11-01.
- Regulation Z, 12 CFR § 1026.18, content of disclosures: the amount financed, read on 2026-11-02.
- Regulation Z, 12 CFR § 1026.4, definition of the finance charge, read on 2026-11-02.
- Regulation Z, Appendix J to Part 1026, annual percentage rate computations for closed-end credit, read on 2026-11-02.
Questions
What is the APR?
Regulation Z defines it as a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of the value you receive to the amount and timing of your payments.
Why is the APR higher than the interest rate?
Because of the fees. They are taken off the amount financed, and the payment, which follows from the interest rate on the whole loan, is then worth less than the loan. On $250,000 at 6% with $5,000 of fees the APR is 6.190%.
What is the amount financed?
Under Regulation Z it starts from the principal loan amount or the cash price, less any down payment, and adds other amounts that the creditor finances and that are not part of the finance charge. Then it subtracts any prepaid finance charge. Here it is the loan less your fees: $245,000.00 in the example.
Which fees count?
Regulation Z lists points, loan fees, assumption fees, finder’s fees and similar charges, and appraisal, investigation and credit report fees, among the finance charges, with exclusions of its own. The calculator counts the fees that you enter and does not decide which ones count. Ask your lender what it counted.
What is the APR when there are no fees?
It is the interest rate. The example loan with no fees has an APR of 6.000%, and with $10,000 of fees it is 6.385%.
How exact does an APR have to be?
As a general rule, Regulation Z accepts an APR that is not more than 1/8 of 1 percentage point above or below the rate worked out by its method. The calculator gives the rate itself to three decimals.
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