Real APR Calculator - Calculate True Loan Cost with All Fees
Real APR Calculator
Calculation Results
Payment Schedule Visualization
Payment Amortization Table
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Why APR Matters More Than Interest Rate?
The interest rate only tells part of the story. Two loans with identical interest rates can have vastly different total costs due to fees, points, and closing costs. APR provides a standardized way to compare the true cost of different loan offers.
Example Comparison:
Interest Rate: 6.0%
Fees: $5,000
APR: 6.35%
Interest Rate: 6.25%
Fees: $1,000
APR: 6.31%
Result: Despite having a higher interest rate, Loan B is actually cheaper due to lower fees!
What Does a 24% APR Mean?
A 24% APR (Annual Percentage Rate) means that the cost of borrowing money or the yearly interest rate you will be charged on a loan or credit is 24% per year, expressed as a percentage of the amount borrowed.
Key points about APR:
- Annual: It represents the interest rate over a full year.
- Percentage: Shown as a percentage of the principal (the amount borrowed).
- Includes Fees: Unlike just the nominal interest rate, APR usually includes fees and other costs associated with the loan, providing a more complete picture of the cost of borrowing.
Example:
- If you borrow $10,000 at 24% APR and no payments are made during the year, you would owe $2400 in interest over one year (assuming simple interest for simplicity).
- In reality, especially for credit cards or loans with monthly compounding, the interest accrued can be different due to how often the interest is calculated and added to the balance.
Summary:
- 24% APR means you pay roughly 24% of the loan amount in interest and fees each year.
- It helps compare the cost of different loans or credit products more fairly.
How Much Is 26.99 APR on $5000?
Is 22% APR High?
A 22% APR is generally considered high for most traditional loans but still fairly common for many credit cards, especially for those with average or below-average credit scores.
Is 29.99% APR Bad?
29.99% APR is considered high and expensive in almost all traditional lending contexts. If you can find credit with a lower rate, it will almost certainly save you money in interest.
References
Government Resources:
- Consumer Financial Protection Bureau (CFPB): Understanding APR vs Interest Rate
- Federal Trade Commission (FTC): Shopping for a Mortgage
- U.S. Department of Housing and Urban Development: Loan Products and Requirements
- Federal Reserve: Consumer Credit and Payment Studies
- Truth in Lending Act (TILA) - Federal Reserve: TILA Regulations (PDF)
Educational Resources:
- MyMoney.gov: Financial Education Resources
- Investor.gov: APR Definition and Explanation
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