APR Calculator - Calculator See


APR Calculator

Calculate true Annual Percentage Rate (APR) factoring in upfront origination points, processing fees, and closing costs.

Calculator Inputs

$
Face value of loan.
%
Nominal contract rate.
Loan term.
$
Points and lender origination fees.

Calculated Results

True Annual Percentage Rate (APR)
6.84% True APR
Nominal Stated Interest Rate 6.50% Stated
Total Prepaid Finance Fees $4,000.00
Net Financed Proceeds $196,000.00
Values calculate live as you adjust inputs.

About APR Calculator

Truth-in-Lending Act (TILA) statutory calculation expressing the full borrowing cost as an annualized percentage, incorporating all prepaid finance fees.

What is APR Calculator?

Truth-in-Lending Act (TILA) statutory calculation expressing the full borrowing cost as an annualized percentage, incorporating all prepaid finance fees.

How to Use This Calculator

  1. Enter loan amount.
  2. Enter stated nominal contract rate.
  3. Enter loan term and total prepaid lender fees.
  4. View true APR comparison.

The Mathematical Formula & Variables

Iteratively solve for APR equating net received funds to monthly payment stream

Step-by-Step Worked Example

Scenario: $200,000 loan at 6.5% for 30 years with $4,000 in upfront fees.

  1. Monthly payment based on $200k = $1,264.14.
  2. Borrower only receives $196,000 cash in hand.
  3. The effective rate solving $196k = 6.69% APR.

Result: 6.69% True APR

Frequently Asked Questions

Why is APR higher than the interest rate?

APR includes prepaid financing fees (origination fees, discount points, processing fees) spread over the life of the loan.