Loan APR Calculator (with Fees & Points)
Compute the true APR of a loan including origination fees, points, and closing costs.
What this calculates
The interest rate isn't the cost of the loan — fees and points add to it. APR (annual percentage rate) folds those costs into a single rate so loans are comparable. A 6.5% loan with $5k fees may have an APR closer to 6.9%.
Formula & how it works
Net proceeds = loan amount − fees. Solve for the rate that makes the payment stream on the original loan amount discount to the net proceeds. We use bisection on the standard amortization formula.
Worked example
$300,000 loan, 30 yr, 6.5% rate, $5,000 fees. Monthly payment $1,896. APR ≈ 6.65% — the fees push the effective rate up ~0.15%.
Frequently asked questions
APR vs interest rate?
Interest rate is the rate on the principal. APR includes mandatory fees, points, and broker costs spread over the loan life.
Discount points?
Each point = 1% of loan, prepaid to lower the rate. Worth it only if you keep the loan past the breakeven (years = point cost ÷ monthly savings).
Always pick lower APR?
Usually. But if you'll pay off early, the upfront fees never amortize — a higher-rate, no-fee loan can win.
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