APR Calculator
Find the true annual cost of any loan — including fees
APR vs Interest Rate — What's the Difference?
| Interest Rate | APR | |
|---|---|---|
| What it measures | Cost of borrowing principal only | True total annual cost |
| Includes fees? | ❌ No | ✅ Yes |
| Best for | Comparing same-fee loans | Comparing any two loans |
| Always higher? | — | ✅ Always ≥ interest rate |
| Required disclosure? | Yes | Yes (Truth in Lending Act) |
Always compare APR, not interest rate. Lender A might offer 6.5% with $3,000 in fees (6.9% APR). Lender B might offer 6.8% with $500 in fees (6.85% APR). Lender B is actually cheaper — you'd only see that by comparing APR.
How APR Is Calculated
Typical APR Ranges by Loan Type
| Loan Type | Excellent Credit | Good Credit | Fair Credit |
|---|---|---|---|
| 30-yr Fixed Mortgage | 6.5–7.0% | 7.0–7.8% | 7.8–9.0% |
| 15-yr Fixed Mortgage | 6.0–6.5% | 6.5–7.2% | 7.2–8.5% |
| New Auto Loan (60mo) | 4.5–6.0% | 6.0–9.0% | 9.0–15.0% |
| Used Auto Loan (60mo) | 5.5–7.5% | 7.5–12.0% | 12.0–20.0% |
| Personal Loan (3yr) | 7.0–11.0% | 11.0–18.0% | 18.0–28.0% |
| Credit Card (purchase) | 17.0–22.0% | 22.0–26.0% | 26.0–30.0%+ |
| Home Equity Loan | 5.5–7.5% | 7.5–9.5% | 9.5–12.0% |
| Student Loan (federal) | 6.53–9.08% (2024–25, fixed) | ||
What Fees Are Included in APR?
| Fee Type | Included in APR? | Typical Amount |
|---|---|---|
| Origination / processing fee | ✅ Yes | 0.5–2% of loan |
| Discount points | ✅ Yes | 1% per point |
| Broker fees | ✅ Yes | Varies |
| Mortgage insurance (PMI) | ✅ Yes | 0.2–1.5% annually |
| Application fee | ✅ Yes | $25–$500 |
| Appraisal fee | ❌ No | $300–$600 |
| Title insurance | ❌ No | $500–$2,000 |
| Home inspection | ❌ No | $300–$500 |
| Prepayment penalty | ❌ No | Varies |
Frequently Asked Questions
What is APR?
APR (Annual Percentage Rate) is the true yearly cost of a loan, including both the interest rate and all mandatory fees, expressed as a single percentage. It's required by law (Truth in Lending Act) so you can compare loan offers accurately.
What's the difference between APR and interest rate?
The interest rate only covers the cost of borrowing the principal. APR adds in all fees — origination fees, points, broker fees — and spreads them over the loan term. APR is always equal to or higher than the interest rate. When fees are $0, APR = interest rate.
Why does loan term affect APR?
Fees are a one-time cost. Spread over 30 years, a $3,000 fee barely moves your APR. Spread over 2 years, it has a much bigger impact. This is why short-term loans with fees show a larger gap between stated rate and APR.
What is a good APR for a personal loan?
Below 10% APR is excellent (requires strong credit). 10–15% is good. 15–20% is average. Above 20% is high — consider improving your credit score before borrowing. Credit unions often offer lower APRs than banks for personal loans.
Is a lower APR always better?
For the same loan term, yes — lower APR means lower total cost. But if you plan to pay off the loan early, a loan with higher rate + lower fees might cost less than one with lower rate + high upfront fees (since you won't have time to spread the fees out).
How do I use APR to compare two loan offers?
Enter each loan's details separately into this calculator and compare the APR. The loan with the lower APR costs less over the full term. If you plan to pay early, also compare total dollar costs at your expected payoff date.