APR Calculator

How to Use This Calculator

The APR calculator determines a loan's APR based on its interest rate, fees and loan term. Even if you don't know your exact loan terms yet, you can run possible scenarios by tweaking the numbers in the calculator. That can help you more effectively compare loan offers.

1. Plug In Your Numbers

Input this information into the loan calculator:

• Loan amount: If you already have a loan, input the principal balance—that's how much you originally borrowed. If you're still weighing your options, plug in how much you plan to borrow.
• Finance charges: Required fees from the lender, such as an origination fee or mortgage broker fee. Situational fees, such as a late payment fee, generally aren't included in APR calculations.
• Interest rate: The interest rate that the lender charges on the loan. If you've already taken out a loan, you can find your interest rate in your loan details. If you're still shopping around, getting prequalified can give you a sense of what rates might be available to you.
• Term: The number of years you have to repay the loan. Find this in your loan details if you already have a loan. Or, try inputting different loan terms to see how the time you take to repay your loan impacts the monthly payment and the total cost of borrowing.

Tip: Often, the Federal Truth in Lending Act requires lenders to tell you the APR, so you won't have to calculate it on your own. In some cases, there are even templates that lenders must use, such as the loan estimate form for mortgages. When reviewing that form, you can find the interest rate on the first page and the loan's APR on page three.

2. Click Calculate

Hit the "calculate" button and the calculator display will update to show you the following:

• APR: The true cost of borrowing, taking into account the loan terms you input.
• Estimated monthly payment: An estimate of how much you'll need to pay each month.
• Payoff date: Based on the information you input, this is when your loan might be scheduled to be paid off.
• Total interest paid: It's a good idea to pay careful attention to this number, as it gives you insight into how much you're spending long-term to borrow money now.
• Total payments: The sum of your interest charges, fees and the principal amount you plan to borrow. In other words, it's the full amount you'll repay based on your loan agreement.

You can also toggle the calculator display to see a loan payment schedule. This gives you a breakdown of your monthly payments, showing how much of each payment goes toward interest versus principal each month.

3. Apply Your Insights

Once you've crunched the numbers on a loan's APR, you can use the results to decide whether a loan offer is a good fit. Remember, APR is an apples-to-apples way to compare multiple offers. Since it factors in interest and fees, APR shows you the full cost to borrow. Compare the APR for each offer you're considering to find the most affordable option.

As you review loans, be sure to factor in the following:

• Look at the monthly payment. The long-term cost of a loan is important, but so is being able to afford your monthly payment. Play with the numbers to strike a good balance. Extending your loan term can often lower your monthly payments, but it also typically means paying more overall.
• Consider whether to borrow now. If you find the APR on available loan offers is higher than you'd like to pay, consider holding off on borrowing. In the meantime, you can check your credit report for free through Experian. You'll get insight into what's impacting your credit scores, which gives you the opportunity to make improvements before you apply for a loan.
• Compare multiple offers. When you're ready to borrow, Experian's loan comparison platform can help you browse offers that are a good fit for your unique credit profile. By reviewing personalized matches, you can conveniently look through lender offers to find the loan with the lowest APR.

What Is a Good APR?

Your definition of a "good APR" might come down to a few different factors, including the type of loan, your credit and the current interest rate environment. Generally speaking, you can compare rates to the national average to get a sense of whether it's a competitive offer.

The Federal Reserve publishes average APRs for 24-month personal loans at commercial banks. If a rate is well above the national average, you could consider it expensive. If, on the other hand, it's well below the average, it could be considered a good rate.

But remember that your credit plays a big role in what rates you qualify for. Browse loan offers matched to your credit profile to see what might be available.

What's the Difference Between APR and Interest Rate?

The difference between a loan's APR and its interest rate can depend on the type of financial product.

For installment loans, such as personal, auto, student and mortgage loans, the APR and interest rate may be the same if there are no finance charges. However, if there is a finance charge, such as an origination fee, the APR will be higher than the interest rate because your cost of borrowing is more than the interest charges alone. The difference between the APR and interest rate can also increase if the loan's term is shorter, as you'll be repaying the entire finance charge more quickly.

On credit cards, the APR and interest rate are the same because a credit card's APR doesn't take the card's fees into account. As a result, you may want to compare not only card APRs but also their annual fees, balance transfer fees, foreign transaction fees and any other fees when deciding on a credit card. You can generally avoid paying interest on your credit card entirely if you pay off the balance in full every month.

How Improving Your Credit Can Unlock Lower APRs

Lenders may offer you a different APR on your loan depending on your creditworthiness and the repayment term you choose. Applicants with higher credit scores and lower debt-to-income ratios may qualify for lower interest rates and finance charges, leading to a lower APR.

To improve your credit and avoid late payment fees, make all your debt payments on time. Paying down your credit card balances can also help your credit by lowering your credit utilization ratio.

Tip: All else being equal, the lowest APR may be best, but be sure to look at the big picture. For example, lenders may offer you a lower rate on shorter-term loans. But that also means higher monthly payments. If that's not affordable, the longer-term loan with a higher APR may be a better fit for your budget.

Frequently Asked Questions

More Experian Loan Calculators

You can use Experian's APR calculator to help you understand the true cost of borrowing before you take out a loan. Beyond that, you can use these other calculators to help you crunch the numbers on specific loan types:

• Personal loan calculator: See how your loan term and rate impact your monthly payment and the total interest you'll pay.
• Mortgage calculator: Plan for homeownership by seeing how the size of your mortgage, your down payment and your loan's interest rate all impact your monthly payments and the total cost of your home loan.
• Car payment calculator: The terms of your auto loan have a big impact on affordability. Compare your options to pick the best car payment for you.