Representative APR Calculator
A representative APR calculator estimates the yearly cost of credit when an arrangement fee is included. Enter the amount, stated rate, fee and term to compare the note rate with the estimated APR and the effective compounded rate.
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How this calculator works
The APR is the yearly cost of credit when fees are included. It is often higher than the advertised rate because a fee reduces the money you actually receive while the repayments stay the same.
This calculator finds the monthly periodic rate i that solves:
Amount - fee = M * (1 - (1 + i)^-n) / i
- Amount = loan amount
- fee = arrangement fee paid up front
- M = monthly repayment at the stated rate
- n = number of monthly payments
It reports the nominal APR = i * 12 * 100 and the effective APR = ((1 + i)^12 - 1) * 100. If the fee is zero, both equal the stated rate.
Fees vary by lender, so enter the fee from your own offer. A lender's advertised representative APR is the rate at least 51% of successful applicants receive.