APR Calculator

Find the APR implied by total interest, loan amount, and loan term, assuming equal monthly payments.

APR Calculator

Find the annual percentage rate implied by a loan amount, total interest, and term.

Loan amount

Total interest

Loan term (years)

years

Estimated APR

Monthly payment

$967

Results are estimates for informational purposes only.

How to use this calculator

Finding the rate behind a loan quote

Lenders often quote a monthly payment or a total interest figure instead of a rate. This calculator works backward from the loan amount, total interest, and term to the annual rate that produces equal monthly payments over that term.

Dividing total interest by the loan amount and the number of years understates the rate, because you do not owe the full balance for the whole term. Each payment reduces the balance, so interest is charged on a smaller amount every month. For a $50,000 loan with $8,000 of interest over 5 years, the simple division suggests 3.2%, but the actual rate is about 6.0%.

Where this helps

Use it when an offer shows a payment but hides the rate, such as “$20,000 for $416.67 a month over 5 years.” That is $25,000 in total payments, or $5,000 of interest, which works out to about 9.15%. Converting quotes into rates lets you compare them with a credit union offer or your credit card APR on equal terms.

It also helps with buy-now-pay-later plans, furniture or appliance financing, and informal loans where only the total repayment is agreed. Once you know the rate, you can judge whether paying cash or borrowing elsewhere would be cheaper.

You can also review Loan Calculator and Loan Comparison Calculator to compare scenarios.

Formula

Monthly payment = (Loan Amount + Total Interest) / Number of Months
Solve for the monthly rate r in: Payment = Loan Amount × r / (1 − (1 + r)^−n)
APR = 12 × r (the equation has no closed-form solution, so r is found numerically)

Example

Loan amount: $50,000. Total interest: $8,000. Term: 5 years (60 months).
Monthly payment = $58,000 / 60 = $966.67.
The monthly rate that amortizes $50,000 in 60 payments of $966.67 is about 0.50%.
APR = 12 × 0.50% ≈ 6.0%.

APR on a $20,000 loan

Equal monthly payments with no upfront fees. Each row changes the total interest and the term.

Total interest	Loan term (years)	Estimated APR	Monthly payment
$1,500	3 years	4.76%	$597
$3,000	3 years	9.31%	$639
$3,000	5 years	5.64%	$383
$5,000	5 years	9.15%	$417
$8,000	7 years	10.13%	$333

Frequently asked questions

Is this the same as the APR on my loan disclosure?

It matches when the loan has no upfront fees. A disclosed APR also counts fees such as origination charges, which raise the APR above the interest rate.

Why not just divide interest by the loan amount and years?

That shortcut assumes you owe the full amount for the entire term. With monthly payments the balance falls over time, so the true rate is roughly double the shortcut result on a typical installment loan.

What is the difference between APR and interest rate?

The interest rate is the cost of borrowing the principal. APR adds most upfront fees to that cost and expresses the total as a yearly rate, which is why US lenders must disclose it under the Truth in Lending Act. When a loan has no fees, the two are the same.