APR Calculator
Compute the Annual Percentage Rate (APR) of an amortizing loan — enter the loan amount, term, the contractual interest rate the lender quotes, and any upfront fees to see the true cost of borrowing.
Your Result
-
| Result | What it means? |
|---|---|
| < 5% | ExcellentAPR is below 5% — among the cheapest consumer loans available. |
| 5% – 10% | GoodAPR is between 5% and 10% — a competitive rate for most credit profiles. |
| 10% – 18% | FairAPR is between 10% and 18% — typical for many consumer loans and credit cards. |
| 18% – 30% | HighAPR is between 18% and 30% — common for subprime or short-term lending. |
| 30% – 50% | Very highAPR is between 30% and 50% — expensive; review alternatives carefully. |
| > 50% | ExtremeAPR exceeds 50% — likely a payday or predatory product; avoid if possible. |
| — | UnknownEnter the loan terms above to compute the APR. |
APR Equation
APR=i · 12 where P − F = M · [1 − (1+i)⁻ⁿ] ⁄ i
APR is the annualized periodic rate i that equates the net disbursed amount (principal minus fees) with the discounted stream of monthly payments. Nominal APR = i × 12; Effective APR (EAR) = (1 + i)¹² − 1.
- (P − F) = M · [1 − (1+i)⁻ⁿ] ⁄ i — present value of the payment stream at rate i equals the net amount the borrower actually receives.
- Newton–Raphson is used to solve for i, seeded at the contractual rate. Convergence is typically within 5–8 iterations.
- Nominal APR (Reg Z convention) is the headline number on US loan disclosures; EAR makes compounding comparable across offers with different payment frequencies.