APR, the annual percentage rate, expresses the yearly cost of borrowing including fees, not just the interest rate. It rolls upfront charges into the loan and solves for the rate that makes the payments match, so it is usually higher than the stated interest rate. A free APR calculator estimates it in your browser once you enter the amount, rate, term and fees.
Free APR calculator. Include upfront fees in a loan to find the true annual percentage rate, so you can compare offers on an equal, honest basis.
Open APR Calculator → Free toolFree loan and EMI calculator. Calculate your monthly payment, total interest and total repayment for any loan amount, rate and term instantly.
Open Loan / EMI Calculator →The interest rate is the cost of the borrowed money alone. APR is broader: it folds in origination fees, points and certain closing costs, then expresses the whole cost as a single yearly percentage. Because those fees are added to what you effectively pay, the APR on a loan with fees is higher than its plain interest rate, which is exactly why lenders must disclose it for comparison.
Two loans can share the same interest rate but differ in fees, so the one with lower fees has a lower APR and costs less overall. Comparing APRs, rather than headline rates, is the honest apples-to-apples check. Note that APR assumes you keep the loan for the full term; if you pay it off early, front-loaded fees make the true cost of a short holding period higher than the APR suggests.
No. The interest rate is the cost of the money; APR also includes fees like origination charges and points, so APR is usually higher.
Because APR bakes in upfront fees. A loan with no fees has an APR close to its interest rate; fees push the APR above it.
By APR, since it reflects the total yearly cost including fees. Two loans at the same rate can have very different APRs.