APR Calculator

Use our free APR Calculator to quickly estimate the true cost of a loan, based on key inputs like loan amount, interest rate, term, and fees. Perfect for borrowers, homeowners, and financial planners.

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APR Formula

\[\nAPR \approx \left( \frac{\text{Total Loan Cost}}{\text{Loan Amount} \times \text{Loan Term (years)}} \right) \times 100\n\]\n\nWhere:\n- **Total Loan Cost** = Interest Paid + Fees\n- **Loan Amount** = Principal borrowed\n- **Loan Term** = Length of loan in years
Example:
Loan = $200,000; Interest Rate = 6%; Term = 30 years; Fees = $5,000\n\nTotal interest ≈ $231,676\n\nTotal cost = $231,676 + $5,000 = $236,676\n\nAPR ≈ (236,676 ÷ 200,000 ÷ 30) × 100 ≈ **6.39%**

The APR (Annual Percentage Rate) is the true cost of borrowing. Unlike the nominal interest rate, APR includes lender fees and closing costs, helping you compare loans more accurately.

How this APR calculator works

This calculator estimates the true annual percentage rate of a loan by factoring in both interest charges and upfront fees. It provides borrowers with a realistic view of their borrowing costs, making it easier to compare offers from different lenders.

When to use this APR calculator

Comparing mortgage offers from different lenders

Evaluating personal loans or car loans with fees

Checking how closing costs affect loan affordability

For financial planning and budgeting before borrowing

Ensuring transparency when reviewing loan disclosures

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Average Profit Margins by Industry

Understand how lending compares to other service industries. Below are typical profit margin ranges:

Mortgage Lenders

15–25%
net margin

Banks & Financial Institutions

20–30%
net margin

Real Estate Agents/Brokerages

15–30%
net margin

Roofing Contractors

20–40%
net margin

HVAC Contractors

10–20%
net margin

Plumbing Contractors

20–35%
net margin

Electrical Contractors

15–25%
net margin

Construction/Contracting

15–30%
net margin

These benchmarks help borrowers and advisors evaluate whether loan offers and lender margins are competitive.

Frequently Asked Questions

It provides a close estimate using your loan inputs. Official APR may vary slightly based on compounding and lender calculations.

Interest rate is the cost of borrowing principal. APR includes interest plus fees for a true cost of borrowing.

Yes—any installment loan with fees can be analyzed with APR.

It works best for fixed-rate loans. For ARMs, APR reflects the initial rate but future adjustments may vary.

Yes—enter all upfront fees to see their impact on APR.

No—APR includes only loan-related costs, not escrow items.

Because it includes lender fees and closing costs spread over the loan term.

Pair it with ServiceAgent.ai to generate automated loan comparisons, estimates, and client reports.

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