Finance

APR Calculator

Loan amount

Upfront fees

Note rate

Term (months)

Effective APR

9.59%

Note rate: 8.00%
Monthly payment: $488.26

Find a loan's true annual percentage rate once upfront fees are included.

By Maya R. · Reviewed by David K., CFA · Updated 2026-06-03

This is an educational estimate, not financial advice. Figures exclude taxes, fees, and individual circumstances. Verify with a licensed professional before making money decisions.

How to use this calculator

Enter the amount you are borrowing and the note (quoted) interest rate.
Add the upfront fees — origination, points, and similar lender charges.
Set the term in months.
Read the effective APR, which reflects the true cost once those fees are included.

Formula

APR solves: NetProceeds = Σ Payment ÷ (1 + i)^k

NetProceeds — amount borrowed minus upfront fees
i — monthly rate the equation solves for
k — each payment period, 1…n

Worked example

A $20,000 loan at an 8% note rate carries a $488 monthly payment over 48 months. Add $600 in upfront fees and you only receive $19,400 — so the effective APR rises to roughly 9.6%.

Frequently asked questions

Why is APR higher than the note rate?

Upfront fees reduce the money you actually receive while payments stay the same, raising the effective rate.

What fees go into APR?

Origination, points, and certain closing costs. Third-party costs like appraisal may be excluded.

Is APR the same as APY?

No. APR ignores intra-year compounding; APY includes it.

Should I compare loans by APR?

APR is a better cross-loan comparison than the note rate, but compare similar terms.

Does a longer term change APR?

Yes — fees spread over more payments, slightly lowering APR.

Related calculators

Maya R. · Author

Reviewed by David K., CFA · Updated 2026-06-03

Sources

Truth in Lending Act (Regulation Z) — APR disclosure rules.

Methodology · Report an error

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View answer.json (AI feed)

{
  "tool": "apr",
  "question": "How does the APR Calculator work?",
  "answer": "Find a loan's true annual percentage rate once upfront fees are included.",
  "formula": "APR solves: NetProceeds = Σ Payment ÷ (1 + i)^k",
  "inputs": [
    {
      "id": "amount",
      "label": "Loan amount",
      "unit": "$"
    },
    {
      "id": "fees",
      "label": "Upfront fees",
      "unit": "$"
    },
    {
      "id": "rate",
      "label": "Note rate",
      "unit": "%"
    },
    {
      "id": "months",
      "label": "Term (months)",
      "unit": null
    }
  ],
  "sources": [
    {
      "name": "Truth in Lending Act (Regulation Z)",
      "url": "https://www.consumerfinance.gov/",
      "note": "APR disclosure rules."
    }
  ],
  "updated": "2026-06-03"
}