Calculate the true Annual Percentage Rate of a loan including all fees and charges.
| Nominal Interest Rate | — |
| Total Fees | — |
| Monthly EMI | — |
| Total Interest Paid | — |
| Total Cost of Loan | — |
APR (Annual Percentage Rate) is the true cost of borrowing money expressed as a yearly rate. Unlike the nominal interest rate, APR includes all fees, processing charges, and other costs, making it a better tool for comparing different loan offers.
The nominal interest rate only reflects the cost of borrowing the principal. APR includes additional charges like processing fees, documentation fees, and insurance. A loan with a lower interest rate but high fees may have a higher APR than a loan with a slightly higher rate but no fees.
Q: How is APR calculated?
A: APR is calculated by finding the monthly rate that equates the present value of all loan payments to the loan amount minus fees, then annualizing it.
Q: Is a lower APR always better?
A: Generally yes — lower APR means lower total cost of the loan. Always compare APR (not just interest rate) when shopping for loans.
Calculatr