Loan APR Calculator True Cost of Borrowing Including Fees
Calculate the true Annual Percentage Rate (APR) of any loan once fees are included. Compare nominal interest rate vs real APR, and see the full cost of credit over the loan term.
Country
Currency
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Loan Details
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Loan
€
Amount borrowed before fees.
mo
Total number of monthly payments.
%
The stated annual interest rate on the loan. APR will be higher once fees are added.
€
The monthly payment quoted by the lender. APR will be back-calculated from this.
Fees
€
Arrangement, origination, or processing fee paid at the start.
€
Any fixed monthly administration fee added to each payment.
mode
Affects the effective loan amount used in the APR calculation. Most personal loans deduct the fee from proceeds.
True APR (Effective Annual Rate)
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Nominal APR (annualised monthly rate)
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Stated interest rate
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Monthly Payment
—
inc. monthly fee if any
Total Repaid
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all payments
Total Interest
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interest only
Total Fees
—
upfront + monthly fees
Loan Amount
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borrowed
Effective Principal
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after fee treatment
Stated Rate
—
nominal annual
Nominal APR
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monthly rate × 12
Effective APR (EAR)
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compounded annual
APR Gap
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APR minus stated rate
Monthly Payment
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total per month
Total Interest
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over term
Total Fees
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all fees
Cost of Credit
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interest + fees
Total Repaid
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principal + credit cost
Fee % of Loan
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fee impact
Full APR Breakdown
At Stated Rate (No Fees)
Monthly payment—
Total interest—
Total fees—
Total repaid—
True Cost (With Fees)
Monthly payment—
Total interest—
Total fees—
Total repaid—
Cost of Credit Breakdown
Principal
Interest
Fees
APR at Different Upfront Fee Levels
Upfront Fee
Fee % of Loan
Nominal APR
Effective APR
APR Gap
Total Cost of Credit
APR at Different Loan Terms
Term (Months)
Monthly Payment
Effective APR
Total Interest
Total Repaid
Important: This calculator estimates APR using the loan amount, stated interest rate, fees, and term you enter. It uses the Newton-Raphson method to solve for the internal rate of return. It does not replicate any jurisdiction-specific APR calculation standard (such as the EU Consumer Credit Directive or US Truth in Lending Act), which may treat certain fees differently. Results are estimates only.
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📈 Key Notes
APR includes both interest and fees in one comparable rate
Upfront fees have more impact on short loans than long ones
APR stands for Annual Percentage Rate. It is a single rate that represents the true annual cost of a loan including both the interest charged and any mandatory fees. Unlike the stated interest rate, which only covers the cost of the borrowed money itself, APR captures the full cost of credit and allows fair comparison between loan products.
Term
What It Represents
Stated interest rate
Annual cost of borrowing money, excluding fees
Nominal APR
Monthly internal rate of return × 12, including fees
Effective APR (EAR)
(1 + monthly rate)^12 − 1, accounting for compounding
Cost of credit
Total interest paid plus total fees over the loan term
Why fees raise the APR more on short loans
A fixed upfront fee has a larger proportional effect on APR for a short loan than for a long one. On a 12-month loan a fee of 2% of the principal adds roughly 2 percentage points to the APR. On a 60-month loan, the same fee is spread across five years of payments, so its contribution to the APR is much smaller. This is why comparing APR rather than just the fee amount matters when evaluating different loan terms.
Nominal APR vs effective APR
Nominal APR is simply the monthly interest rate multiplied by 12. Effective APR, also called EAR or effective annual rate, compounds the monthly rate over 12 months using the formula (1 + monthly rate)^12 − 1. Effective APR is always slightly higher than nominal APR because of the compounding effect. Most consumer credit disclosures in Europe use effective APR; US disclosures typically use nominal APR.
Deducted fee vs added to loan
When an upfront fee is deducted from proceeds, the lender charges you the fee upfront but your payment schedule is still calculated on the full loan amount. You receive less cash but repay more, which raises the effective cost. When a fee is added to the loan balance, you borrow the fee amount and pay interest on it as well as the principal, which also increases the cost but by a different mechanism. Both treatments raise the APR relative to the stated rate.
Frequently Asked Questions
What is the difference between APR and interest rate?+
The interest rate is the annual cost of borrowing the loan principal, expressed as a percentage. APR is a broader measure that includes the interest rate plus mandatory fees such as arrangement or origination fees, expressed as a single annual rate. APR is always equal to or higher than the stated interest rate. Using APR to compare loans is more accurate than comparing stated rates alone.
Why is my APR higher than the interest rate I was quoted?+
APR is higher than the quoted interest rate whenever fees are included in the cost of credit. Common fees that raise APR include arrangement fees, origination fees, broker fees, and monthly administration charges. Even a relatively small upfront fee can add several percentage points to the APR, particularly on short-term loans.
What is the difference between nominal and effective APR?+
Nominal APR multiplies the monthly rate by 12. Effective APR, also called effective annual rate, compounds the monthly rate across 12 months using the formula (1 + monthly rate)^12 minus 1. Because compounding causes interest-on-interest, effective APR is slightly higher than nominal APR. The difference grows as the monthly rate increases.
How does a deducted fee work?+
A deducted fee means the fee is subtracted from the loan proceeds before disbursement. For example, on a loan of 10000 with a 200 deducted fee, you receive 9800 but your repayment schedule is based on 10000. This effectively means you are paying interest on 10000 while only having use of 9800, which raises the true cost. This is the most common structure for personal loan arrangement fees.
Is this calculator’s APR figure the same as a regulated APR?+
No. Regulated APR figures under the EU Consumer Credit Directive, UK Consumer Credit Act, or US Truth in Lending Act use specific methods for handling fee timing, irregular payment schedules, and certain fee exclusions that differ from the simplified Newton-Raphson approach used here. This calculator gives an accurate estimate for standard fixed-rate monthly loans but is not a substitute for a lender’s legally required APR disclosure.
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