APR, APY & Cost of Debt
Three calculators that translate financial jargon into plain dollars — so you know exactly what borrowing costs and what saving earns.
APR Calculator
Find your true borrowing cost after fees
Monthly Payment
$200.38
True APR
1200.000%
Total Interest Paid
$2,022.77
Total Cost of Loan
$12,222.77
Fee impact on rate
+1192.500%
Disclaimer:These calculators are provided for educational and informational purposes only and produce estimates based on the figures you enter. Actual APR, APY, and total borrowing costs depend on your lender's terms, fees, and compounding method and may differ from these results. Nothing here constitutes financial, investment, tax, or legal advice. Consult a qualified professional before making financial decisions. See our full disclaimer.
APR vs. Interest Rate (and Why Early Payments Feel Wasted)
The rate printed on your loan documents and the APR are not the same number, and the gap matters more than most borrowers realize.
Interest rate is the raw cost of borrowing the principal, expressed as a yearly percentage. APRfolds that rate together with required fees, closing costs, and points, spreading them across the loan term so you can compare loans with different fee structures on equal footing. Two loans with an identical interest rate can carry different APRs, and the one with more fees isn't actually cheaper just because its headline rate matches.
Amortizationis the schedule that turns a loan balance into a series of flat payments. Each payment covers that period's interest first, and whatever is left over reduces principal. Because interest is calculated on the remaining balance, and the remaining balance is highest at the start, the earliest payments are mostly interest and the latest payments are mostly principal — even though the payment amount itself stays constant for the life of a fixed-rate loan.
That front-loading is why paying extra early in a loan's term saves more total interest than paying the same extra amount later. An early extra payment skips interest that would otherwise accrue on that principal for years to come, while a late extra payment only skips interest for the handful of remaining months. It's also why refinancing resets the clock: a new loan starts the interest-heavy schedule over again, even at a lower rate.
Loan Costs, Answered
What's the difference between interest rate and APR?
Interest rate is the cost of borrowing the principal alone. APR adds in required fees and closing costs and spreads them over the loan term, so it's usually the higher number and the better one for comparing offers with different fee structures.
What does APY mean, and how is it different from APR?
APY (annual percentage yield) measures what you earn on savings, including the effect of compounding; APR measures what you pay to borrow. They describe opposite sides of the same math — compounding frequency — which is why the loan calculators above group them together.
Why does it feel like my loan balance barely moves in the first few years?
Because amortized payments are interest-heavy early on. Interest is charged on the remaining balance, which is largest at the start, so most of an early payment covers interest and only a small slice reduces principal. That mix flips gradually as the balance shrinks.
Does a lower APR always mean the cheapest loan?
Almost always, since APR already bakes in fees — but only when comparing loans of the same term and structure. A shorter-term loan can carry a higher APR yet cost less in total interest simply because it's paid off faster; always check total cost, not just the rate.
Do these calculators account for my lender's specific fees and terms?
No — they estimate based on the rate, amount, term, and fees you enter. Real loans can include rate locks, variable-rate resets, prepayment penalties, or fee structures these general-purpose tools don't model; check your loan documents or ask your lender for exact figures.
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