Loan APR & Effective Interest Rate Calculator

The rate on the term sheet and the rate you're actually paying are rarely the same number once origination fees enter the picture.

Reading This Tool

How To Use This Calculator

Enter the loan amount, its stated rate and term, and any upfront fees deducted from the proceeds.

You still make payments calculated on the full loan amount at the stated rate, but you only actually received the amount left after fees. The effective rate solves for what you're truly paying on the cash you actually got to use.

Your Inputs

Loan Amount $100,000

Stated Annual Interest Rate 8.0%

Loan Term 3 yrs

Upfront Fees Deducted From Proceeds $3,000

Assumes fees are deducted from the loan proceeds at closing rather than paid separately out of pocket, the case that actually raises your effective rate. Fees paid separately don't affect the calculation the same way.

True Cost Of This Loan

Stated Rate

0.00%

Effective Rate (True APR)

0.00%

Net Proceeds Actually Received

Monthly Payment

Stated Rate vs. True Effective Rate

This solves numerically for the internal rate of return on the actual cash flows, the same underlying method regulators use for truth-in-lending APR disclosures. Real APR disclosures may also fold in other charges not modeled here, like mandatory insurance.

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