APR Calculator
Enter the loan amount, the note rate, the term, and any points and upfront fees. The calculator shows the APR next to the nominal rate, so you can see what the fees add to the yearly cost of the loan.
Last updated November 4, 2026
One point is 1% of the loan amount, paid at closing.
Origination and other lender fees that count as finance charges.
Result
APR = 6.165%
| Measure | Value |
|---|---|
| APR | 6.165% |
| Note rate (nominal) | 6.000% |
| APR minus note rate | 0.165 points |
| Monthly payment | $1,199.10 |
| Amount financed | $196,500.00 |
| Total interest | $231,676.38 |
| Points and fees | $3,500.00 |
| Finance charge (interest + upfront) | $235,176.38 |
Which fees count as finance charges depends on the loan type, so use the amounts from your Loan Estimate or Truth in Lending disclosure. Lenders may round the APR, and rules allow a small tolerance. This is an estimate.
Show the work
Formula: payment = L × j ÷ (1 − (1 + j)^−n) at the note rate; amount financed A = L − points − fees; APR = 12 × the monthly rate k that solves payment × (1 − (1 + k)^−n) ÷ k = A.
- Monthly note rate j = 6.000% ÷ 12 = 0.500000%; n = 360. Payment = $200,000.00 × 0.00500000 ÷ (1 − (1 + 0.00500000)^−360) = $1,199.10.
- Points: $200,000.00 × 1% = $2,000.00. Upfront costs: $2,000.00 + $1,500.00 fees = $3,500.00.
- Amount financed: $200,000.00 − $3,500.00 = $196,500.00.
- Solve for k so that 360 payments of $1,199.10 are worth $196,500.00: k = 0.513788% per month (found in 4 iterations).
- APR = 12 × 0.513788% = 6.165%, which is 0.165 points above the 6.000% note rate.
- Finance charge: $231,676.38 interest + $3,500.00 upfront = $235,176.38.
Result: APR = 6.165%
How the APR is found
payment = L × j ÷ (1 − (1 + j)^−n)
A = L − points − fees
payment × (1 − (1 + k)^−n) ÷ k = A
APR = 12 × k
The note rate sets the payment on the full loan amount L, using the monthly rate j and n payments. Points and upfront finance charges are taken off to give the amount financed A. The APR is the yearly rate, 12 times the monthly rate k, at which the same payments are worth exactly A.
There is no direct formula for k, so the calculator solves it with Newton steps kept inside a bracket, which always converges. With no points or fees, A equals L and the APR equals the note rate.
See how we calculate for the formulas, sources and review schedule behind every calculator.
APR versus the note rate
The note rate drives the payment. The APR spreads the upfront costs over the term, so it is higher whenever there are points or fees. The gap is larger on short loans because the same fees are recovered over fewer payments.
What counts as a fee
Which charges count as finance charges depends on the loan type, so use the figures on your Loan Estimate or Truth in Lending disclosure. This calculator treats every amount you enter as prepaid and deducts it from the amount financed. Lenders may round the APR, so their figure can differ slightly.
General information, not financial advice
This calculator gives a general estimate from the numbers you enter. It is not financial or tax advice, and your actual results can differ. Check important decisions with a qualified professional or the official source.
Sources
Official and primary sources for the statements on this page. Their authors have not reviewed or endorsed this page.
- Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026.22, Determination of annual percentage rate.. Requires the APR to be determined by the actuarial method (or the United States Rule) and treats an APR within 1/8 of one percentage point as accurate.
- Consumer Financial Protection Bureau, Regulation Z, Appendix J to Part 1026, Annual Percentage Rate Computations for Closed-End Credit Transactions.. Sets out the actuarial method, in which the unpaid balance is adjusted each unit-period for the finance charge earned and the payment made.
Method follows the actuarial APR definition in Regulation Z (12 CFR 1026.22 and Appendix J), applied to equal monthly payments. Results are estimates, not a loan disclosure or financial advice.
How to use the APR Calculator
- Enter the loan amount and the note rate.
- Enter the term in years or months.
- Enter points as a percent of the loan and any other upfront fees.
- Compare the APR with the note rate.
- Use Copy, Print or Share to keep the result.
Worked example
A 200,000 loan at 6 percent for 30 years has a payment of 1,199.10. With 1 point (2,000) and 1,500 in fees, the amount financed is 196,500 and the APR is 6.165 percent.
| Loan | Payment | Amount financed | APR |
|---|---|---|---|
| 200,000, 6%, 30 yr, 1 point + 1,500 | 1,199.10 | 196,500 | 6.165% |
| 25,000, 7.5%, 60 mo, 2 points + 300 | 500.95 | 24,200 | 8.880% |
| 10,000, 9%, 36 mo, 250 fees | 318.00 | 9,750 | 10.739% |
Frequently asked questions
Is APR the same as the interest rate?
No. The interest rate sets your payment. The APR also includes points and fees, so it is equal or higher and shows the full yearly cost.
Why is my APR higher on a short loan?
The same upfront costs are recovered over fewer payments, so each year carries a larger share of them and the APR rises.
Does APR include compounding like APY?
No. This APR is the monthly rate times 12 with no compounding, while APY compounds. They are different measures and should not be mixed.
Can the APR be lower than the note rate?
Not with points and fees of zero or more. They only reduce the amount financed, which pushes the APR up from the note rate.