Calculate APR for loans and credit cards. Understand the difference between APR and interest rate, daily periodic rate, and true cost of borrowing.
Calculate the true Annual Percentage Rate including fees.
An APR calculator determines the Annual Percentage Rate — the true yearly cost of borrowing expressed as a single percentage that includes both the interest rate and all required fees. For a $10,000 personal loan at 16% interest with a $500 origination fee repaid over 3 years, the APR is 19.51% — not 16%. For credit cards, APR and interest rate are the same because fees are not included in credit card APR calculations. The Federal Truth in Lending Act requires all US lenders to disclose APR so you can make fair comparisons across loan offers. Always compare APRs — not interest rates — when shopping for loans.
The average credit card APR in May 2026 is approximately 22% to 25% for new offers according to Bankrate and WalletHub data. Excellent credit above 750 typically qualifies for 15 to 18% APR. However, APR only matters when you carry a balance — if you pay your full statement balance each month by the due date, even a 30% APR costs you nothing in interest. When you do carry a balance, credit card interest compounds daily at your APR divided by 365. At 19.99% APR, a $3,000 balance accrues approximately $1.64 per day — $49 per month — adding up to $591 per year in interest even without new purchases.
APR or Annual Percentage Rate is the true yearly cost of borrowing including both the interest rate and all required fees expressed as a single percentage. For loans, APR is higher than the stated interest rate because fees are included. For credit cards, APR equals the interest rate because card fees are not included. The Federal Truth in Lending Act requires all US lenders to disclose APR. Formula: APR equals total interest plus fees divided by principal divided by loan term in years multiplied by 100.
The interest rate is the cost of borrowing the principal only. APR is the total annual cost including the interest rate plus all required fees. For a $10,000 personal loan at 16% interest with a $500 origination fee over 3 years, the APR is 19.51% — significantly higher than the stated 16% rate. For credit cards APR and interest rate are interchangeable because credit card APR does not include fees. Always compare APRs not interest rates when shopping for loans.
The average credit card APR in May 2026 is approximately 22% to 25% for new offers per Bankrate and WalletHub data. Excellent credit above 750 qualifies for 15 to 18% APR. Fair credit of 650 to 699 typically sees 22 to 26%. Cash advance APRs average 24.48% — the highest APR type. Federal credit unions are capped at 18% APR by NCUA regulation, meaningfully below the major bank average.
A good credit card APR in 2026 is below 20% — below the national average of 22 to 25%. Excellent credit above 750 should qualify for 15 to 18%. Any APR below 17% is excellent in today's market. However APR only matters if you carry a balance — paying your full statement balance each month by the due date means even a 30% APR costs nothing in interest.
Credit card interest compounds daily using the daily periodic rate — APR divided by 365. At 19.99% APR, the daily rate is 0.0547%. Each day this rate applies to your average daily balance. A $3,000 balance at 19.99% APR accrues approximately $1.64 per day or $49 per month. Some issuers divide by 360 rather than 365 — check your cardholder agreement.
Most cards have multiple APR types: Purchase APR averages 22% for new offers in 2026. Introductory APR is typically 0% for 12 to 21 months on new cards. Balance Transfer APR often starts at 0% for 13 months then reverts to regular APR. Cash Advance APR averages 24.48% and begins immediately with no grace period. Penalty APR up to 27.44% applies after missed payments. Most US credit card APRs are variable and move with the Federal Reserve prime rate.
Mortgage APR is always higher than the stated interest rate because it includes mortgage points, broker fees, mortgage insurance, and certain closing costs. On a $400,000 mortgage at 6.5% interest, APR might be 6.75% to 7.0% after fees. Federal law requires both rates on the Loan Estimate form — APR appears on page 3. When comparing mortgage offers, always compare APRs calculated using the same fee set since some lenders exclude certain fees from their APR calculation.