Discover the True Cost of Your Loans

The interest rate is the cost you pay each year to borrow the money, expressed as a percentage rate. APR (Annual Percentage Rate) includes the interest rate plus other charges or fees (such as mortgage insurance, most closing costs, discount points and loan origination fees) to reflect the total cost of the loan. The APR provides consumers with a bottom-line number they can easily compare with rates from other lenders.

Lenders often advertise low interest rates to attract borrowers, then make up the difference with various fees. Some fees cover legitimate costs of processing loans, while others are simply profit centers for lenders. Common hidden fees include origination fees, application fees, underwriting fees, document preparation fees, and monthly service fees. Our calculator helps you identify all these costs so you can make informed decisions.

Many loan fees are negotiable, especially if you have good credit or are a valuable customer. Origination fees, application fees, and even some monthly service fees can often be reduced or waived entirely if you ask. The key is to know which fees are negotiable and to have competing offers to use as leverage. Our calculator gives you the information you need to negotiate from a position of strength.

Our effective APR calculation follows standard financial formulas used by regulators and financial institutions. It provides a highly accurate representation of your loan's true cost when all inputs are correct. However, for complex loan structures with variable rates or unusual fee schedules, consult with a financial professional. For most personal loans, auto loans, and mortgages, our calculator provides reliable results.

While APR is an excellent metric for comparing loans, it's not the only factor to consider. You should also evaluate the loan term, monthly payment amount, prepayment penalties, and your ability to comfortably make payments. Sometimes a slightly higher APR with more flexible terms might be better for your situation. Our calculator helps you understand all these factors so you can make the best choice.

Mortgage loans typically have more fees than other loan types. Common fees include origination fees (0.5%-1% of loan amount), application fees, appraisal fees, credit report fees, title insurance, escrow fees, recording fees, and underwriting fees. Some lenders also charge points (1 point = 1% of loan amount) to lower your interest rate. Our calculator can help you determine if paying points makes financial sense for your situation.

Lenders are required to provide a Loan Estimate form (for mortgages) or a disclosure of fees upon request. Ask for a complete fee schedule before applying. For non-mortgage loans, request the "Schumer Box" disclosure which outlines key terms and fees. Be wary of lenders who won't disclose fees upfront. Our calculator helps you ask the right questions to get complete fee information.

Some lenders offer "no-fee" loans, but these typically have higher interest rates to compensate. Whether paying an origination fee makes sense depends on how long you plan to keep the loan. If you'll pay it off quickly, a no-fee loan might be better. For long-term loans, paying an origination fee for a lower rate often saves money. Our calculator can help you compare these scenarios.

Enter both loan offers into our calculator to see their true costs. Compare the effective APRs first, then look at total repayment amounts over your planned loan term. Also consider monthly payment differences and how they fit your budget. Sometimes a slightly higher APR with lower monthly payments might be preferable if it reduces financial stress.

Paying fees upfront is usually cheaper in the long run because adding them to the loan means you'll pay interest on those fees. However, if cash flow is tight, rolling fees into the loan might make sense. Our calculator can show you the cost difference between these options so you can make an informed decision based on your financial situation.