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Calculate the Annual Percentage Rate (APR) for loans and credit cards to understand the true cost of borrowing. Our free tool helps you make informed financial decisions.
Enter your loan details and click "Calculate APR" to see results
The Annual Percentage Rate (APR) represents the true cost of borrowing money, expressed as a yearly interest rate. Unlike the nominal interest rate, APR includes both the interest rate and any additional fees or charges associated with the loan.
APR provides a standardized way to compare loan offers from different lenders. Since it includes both interest and fees, it gives you a more accurate picture of the total cost of a loan than the interest rate alone. A lower APR generally means a less expensive loan.
Comparing mortgage offers, credit cards, auto loans, personal loans, and other lending products.
APR doesn't account for compound interest frequency or future rate changes on adjustable loans.
A: No. The interest rate is the cost to borrow the principal amount, while APR includes the interest rate plus other loan fees to give a more comprehensive cost picture.
A: APR includes additional costs beyond just interest, such as origination fees, closing costs, and other lender charges. This makes APR higher than the nominal interest rate.
A: For fixed-rate loans, APR remains constant. For variable-rate loans, APR may change based on market conditions and the terms of your loan agreement.
A: You can potentially get a lower APR by improving your credit score, shopping around with multiple lenders, opting for a shorter loan term, or providing a larger down payment.
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