📊 APR Calculator – Know the True Cost of Your Loan

Understanding the real cost of a loan goes far beyond the advertised interest rate. Lenders often promote a nominal interest rate, but that number alone does not reflect what you actually pay over time. This APR Calculator is designed to give you a clear, accurate, and transparent view of your loan’s true cost, helping you make smarter financial decisions.

Our calculator uses the Annual Percentage Rate (APR), which is the globally accepted standard for comparing loans. Unlike simple interest calculators, APR includes interest charges, upfront fees, repayment frequency, and loan duration, giving you a realistic picture of borrowing costs.

🔍 What This APR Calculator Does

This tool calculates the true APR using the Internal Rate of Return (IRR) method, which is widely used by banks, financial institutions, and regulators. It also breaks down your loan into easy-to-understand components such as:

Periodic payment amount (monthly, quarterly, or yearly)
Total interest paid over the loan term
Total finance charge
Total loan cost
Advertised (nominal) interest rate
Effective Annual Rate (EAR)

By showing both the advertised rate and the actual APR, this calculator helps you compare different loan offers fairly and confidently.

🧮 How the Calculator Works

Enter your loan details such as loan amount, interest rate, and loan term
Add any upfront fees charged by the lender
Choose how often you repay (monthly, quarterly, or yearly)
Select how fees are handled (paid upfront or added to the loan)
Click Calculate APR to instantly see detailed results

The calculator then uses high-precision financial formulas to compute the APR and cost breakdown.

✍️ Example Inputs (For Easy Understanding)

Example 1: Personal Loan (Monthly Payments)

Loan Amount: ₹5,00,000
Nominal Interest Rate: 10%
Loan Term: 5 years
Upfront Fees: ₹10,000
Repayment Frequency: Monthly
Fee Treatment: Paid upfront

Result:
You’ll see the true APR, monthly payment, total interest paid, and total loan cost.

Example 2: Business Loan (Quarterly Payments)

Loan Amount: ₹10,00,000
Nominal Interest Rate: 12%
Loan Term: 3 years
Upfront Fees: ₹25,000
Repayment Frequency: Quarterly
Fee Treatment: Added to loan

Result:
APR increases due to repayment structure and fees, even though the interest rate looks reasonable.

💡 Why APR Matters More Than Interest Rate

Two loans can have the same interest rate but very different APRs because of fees and repayment structure. APR allows you to:

Compare loan offers fairly
Understand the real financial burden
Avoid hidden costs
Make informed borrowing decisions

This is especially important for personal loans, home loans, car loans, education loans, and business financing.

⚠️ Important Disclosure (Please Read)

Disclosure:
The APR shown by this calculator is an estimate based on the Internal Rate of Return (IRR) method and assumes equal periodic payments. It includes applicable fees and repayment frequency as entered by the user. Actual lender APRs may vary due to different fee structures, compounding methods, rounding rules, or payment schedules. This tool is for informational and educational purposes only and does not constitute financial advice. Always confirm loan terms directly with your lender before making financial decisions.