APR calculator
This APR calculator shows the real cost of a loan once an origination fee is included, so you can compare the APR, not just the quoted interest rate.
Amortization schedule
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $3,316.64 | $1,665.40 | $16,683.36 |
| 2 | $3,627.75 | $1,354.29 | $13,055.61 |
| 3 | $3,968.07 | $1,013.97 | $9,087.54 |
| 4 | $4,340.30 | $641.74 | $4,747.24 |
| 5 | $4,747.24 | $234.59 | $0.00 |
Interest rate versus APR
The interest rate is the price of the money you borrow. The APR also includes certain lender fees, spread over the term, so it expresses the full yearly cost. When a lender charges a fee, you receive less than the stated amount but repay it all, which raises the effective rate. The sub-heading above the result shows the APR with the fee.
Using APR to compare offers
Lenders must disclose the APR on most consumer loans, so use it to compare offers with different rates and fees. A loan with a lower rate but a high fee can cost more than one with a higher rate and no fee, especially over a short term where the fee has less time to spread out.
$20,000 at 9% by loan length
Borrowing $20,000 at 9% over 5 years costs $415.17 a month and $4,910 in interest, $24,910 in total. Shorter terms raise the payment but cut the interest, and longer terms do the reverse. The table shows the trade-off across common terms.
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 12-month | $1,749.03 | $988 | $20,988 |
| 2-year | $913.69 | $1,929 | $21,929 |
| 3-year | $635.99 | $2,896 | $22,896 |
| 4-year | $497.70 | $3,890 | $23,890 |
| 5-year | $415.17 | $4,910 | $24,910 |
| 7-year | $321.78 | $7,030 | $27,030 |
| 10-year | $253.35 | $10,402 | $30,402 |
How your rate changes the cost
Personal loan rates vary widely with credit score, from the mid single digits for strong borrowers to 30% or more for weak credit. On $20,000 over 5 years, moving from 9% to 12% adds $1,783 in interest.
| APR | Monthly payment | Total interest |
|---|---|---|
| 6% | $386.66 | $3,199 |
| 7.5% | $400.76 | $4,046 |
| 9% | $415.17 | $4,910 |
| 10.5% | $429.88 | $5,793 |
| 12% | $444.89 | $6,693 |
How much can you borrow for a given payment?
Working backwards at 9% over 5 years, here is the loan size each monthly payment supports.
| Monthly payment | Loan amount |
|---|---|
| $200/month | $9,635 |
| $300/month | $14,452 |
| $400/month | $19,269 |
| $500/month | $24,087 |
When is half of a $20,000 loan repaid?
With a $415.17 payment, the balance falls below half ($10,000) after 34 payments, about 2.8 years into a 5 years loan. Because interest is highest at the start, the second half of the loan is paid down much faster than the first.
| After | Balance left | Paid so far |
|---|---|---|
| 1 year | $16,683 | $4,982 |
| 2 years | $13,056 | $9,964 |
| 3 years | $9,088 | $14,946 |
Frequently asked questions
Is APR the same as the interest rate?
No. APR includes certain fees along with the interest, so it is usually higher than the interest rate.
What fees are included in APR?
Typically origination fees and some other finance charges. What counts depends on the type of loan and the law.
How is a loan payment calculated?
The payment is principal × r ÷ (1 − (1 + r)^−n), where r is the monthly rate (APR ÷ 12) and n is the number of months. Each payment covers that month’s interest first, and the rest reduces the balance.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the money. APR also includes certain fees, so it is the better number for comparing offers. This calculator treats the rate you enter as the rate that accrues on the balance.
Related calculators
Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.