APR calculator
Enter the amount borrowed, repayment amount, term and fees. The calculator estimates the APR implied by those payments.
How to use this calculator: enter the payment pattern from a loan quote or credit agreement. If a fee is paid upfront, untick the fee box so the calculator reduces the net credit received.
APR formula and cashflow approach
APR is calculated by finding the monthly rate that makes the value of future repayments equal to the credit received, then converting that monthly rate into an annual rate.
net_credit = amount_borrowed - upfront_fees_paid_now
find monthly_rate where:
net_credit = Σ monthly_repayment / (1 + monthly_rate)^month
APR = ((1 + monthly_rate)^12 − 1) × 100
If a fee is paid upfront, the borrower receives less net credit for the same repayment schedule, which can increase the APR. If a fee is added to the borrowing, the payment schedule should already reflect that cost.
What your APR result means
The APR result estimates the yearly cost of the borrowing pattern you entered. It is useful because two loans can have similar monthly payments but different fees, terms and total costs.
APR is not the only thing to compare. You should also check the total amount repayable, whether the rate is fixed or variable, whether you can repay early and whether the advertised rate is guaranteed for you.
Compare borrowing options
Compare the APR, total cost, fees and repayment flexibility before applying. The cheapest-looking monthly payment is not always the cheapest borrowing.
APR vs representative APR
APR is the annual percentage rate for a specific borrowing arrangement. Representative APR is the advertised rate a lender uses in marketing. It does not mean everyone accepted will get that rate.
Your personal APR may depend on your credit history, income, existing debts, affordability checks and the lender’s criteria. A soft-search eligibility check can help estimate your chances before a full application.
Watch out: a representative APR can be useful for comparison, but the actual rate offered to you may be different.
What affects APR?
- Interest charged: higher interest normally increases APR.
- Fees: upfront fees can increase the annualised cost.
- Term: the same fee can have a bigger APR effect on shorter borrowing.
- Repayment pattern: fixed payments, deferred payments and balloon payments can change the calculation.
- Credit profile: lenders may price risk differently for different applicants.
- Product type: loans, credit cards, car finance and BNPL can show costs differently.
APR calculator FAQs
What does APR mean?
APR stands for annual percentage rate. It is designed to show the yearly cost of borrowing, including interest and certain charges.
How is APR calculated?
APR is calculated by solving the rate that matches the credit received with the future repayments, then converting that rate into an annual percentage.
Is APR the same as interest rate?
Not always. The interest rate usually describes the interest charged, while APR is meant to reflect the wider yearly cost of borrowing.
Why does a fee increase APR?
A fee increases the cost of credit. If the fee is paid upfront, you receive less net credit for the same repayments, which can raise the APR.
What is representative APR?
Representative APR is an advertised rate. It does not guarantee that every accepted applicant will receive that exact APR.
Key terms used in this calculator
These glossary terms explain the borrowing language used on this page.