Loan APR Calculator — True Cost with Fees
Work out the real APR of a personal or car loan once origination, arrangement and monthly fees are included, see the cash you actually receive and total cost of credit, and compare two offers on one number.
Offer A
In short
APR is the rate that makes the cash you actually receive equal to the present value of every payment, so fees count as interest. A 15,000 loan at 9.9% over 4 years with a 3% origination fee has a payment of 379.72 but an APR of about 12.15%; the same fee on a 2-year loan pushes the APR to 13.8%.
Who this is for: Borrowers comparing loan offers with different fees, rates and terms on one number.
Interest rate vs APR
The interest rate sets the monthly payment. The APR adds the cost of fees by treating them as if they were extra interest, so two loans with different fee structures can be compared on one number. Origination fees deducted from the advance, arrangement fees, mandatory insurance and monthly account fees all raise the APR; optional add-ons do not count.
| Loan | Quoted rate | Fee | APR |
|---|---|---|---|
| 15,000 over 4 years | 9.9% | none | 10.36%* |
| 15,000 over 4 years | 9.9% | 3% origination | 12.15% |
| 15,000 over 2 years | 9.9% | 3% origination | 13.8% |
| 15,000 over 7 years | 9.9% | 3% origination | 11.4% |
* APR here is an effective annual rate (monthly compounding), the UK/EU convention; US "nominal APR" would show 9.90% with no fees. Fee effects are identical either way.
Assumptions
- Monthly payment from the quoted rate; APR solved as the effective annual rate that equates net cash received (amount − up-front fees) with all payments including monthly fees.
- Effective (compounded) APR per UK/EU convention; US nominal APR would be slightly lower for the same loan.
- Total cost of credit = interest + all fees.
Worked example
Offer A: payment 379.72, you receive 14,550 after the 450 fee, APR 12.15%, total cost 3,677. Offer B: payment 398.70, APR 13.24%, total cost 4,138. A is cheaper on both measures by about 460 despite the fee. Had B been 11.9% with no fee its APR would be lower than A's while A still cost slightly less in total — because A effectively borrows 14,550, not 15,000; that is why both lines are shown.
Frequently asked questions
Why is my APR higher than the interest rate?
Fees. An origination fee deducted from the advance means you borrow 15,000 but receive 14,550 while repaying as if you had received all of it.
Is a lower APR always the better loan?
On the same term, yes. Across different terms a longer loan can show a lower APR yet cost more in total — the total-cost line settles it.
Does this work for car finance and UAE or Saudi personal loans?
Yes. For a flat-rate quote use the EMI calculator first to get the payment, then enter that loan here with its fees.
What is a representative APR?
In the UK, the rate at least 51% of accepted applicants get; your own offer may be higher. Enter the rate you were actually quoted.
What is a good APR for a personal loan?
It depends on the market and your credit; what matters is comparing offers on APR for the same term, since the lowest quoted rate with a high fee can cost more.
Does an origination fee change my payment?
No — the payment is set by the rate on the full amount; the fee reduces the cash you receive, which is why the APR rises.
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