APR Calculator
Estimate annual percentage rate (APR) from a loan amount, monthly repayment, number of payments, and any upfront fees. This helps you compare the real cost of borrowing more accurately than relying on the advertised interest rate alone.
APR is especially useful when two loans look similar on the surface but have different fees, payment structures, or total borrowing costs. By turning the full cost into an annualised rate, you get a more realistic comparison point for credit cards, personal loans, car finance, and other borrowing decisions.
Estimate APR
Result explanation
The estimated APR gives you a fuller picture of borrowing cost by taking into account the amount actually received after fees, rather than just the total loan amount on paper. Total paid shows everything you repay over the full term, including fees. Total finance cost shows how much extra the borrowing costs beyond the original amount borrowed.
The effective amount received is also important. If fees are deducted upfront, you are effectively getting less cash in hand than the nominal loan amount, which increases the real cost of borrowing.
How it works
APR is estimated by solving for the monthly rate that makes the present value of all repayments equal to the effective amount received after fees. That monthly rate is then converted into an annual percentage rate.
This makes APR especially useful when comparing loans with different fees and repayment structures. Two loans can have similar monthly payments but very different real borrowing costs.
Worked examples
Example 1: Personal loan with fees
Loan: £10,000
Payment: £195 per month for 60 months
Fees: £150
Because the fees reduce the effective amount received, the APR comes out higher than a simple rate calculation based only on the headline payment schedule.
Example 2: Comparing two offers
Suppose one lender offers a slightly lower monthly payment, but charges a higher arrangement fee. Another lender charges no fee, but the payment is a little higher. APR helps compare both offers on a more equal basis by reflecting total borrowing cost instead of headline payment alone.
Important note
This calculator gives a strong estimate for comparison purposes. A lender’s regulated APR disclosure may differ slightly depending on exact assumptions, repayment timing, and statutory disclosure rules. Use this tool to compare options quickly, then check the lender’s official figures before committing.