Interest Rate Calculator
Find the annual interest rate of a loan based on the payment amount.
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Unmasking the True Cost of Borrowing
When shopping for a loan, the monthly payment is important, but the Interest Rate (and APR) tells you the true cost of the deal.
Interest Rate vs. APR
These two terms are often used interchangeably but are different:
- Interest Rate: The cost of borrowing the principal amount.
- APR (Annual Percentage Rate): Includes the interest rate plus other costs like broker fees, closing costs, and discount points. APR is the better measure of total cost.
What Affects Your Rate?
Lenders use "Risk-Based Pricing." The more risky you appear (low credit score, high debt-to-income ratio), the higher your rate will be. Improving your credit score by just 20 points can sometimes save you thousands over the life of a loan.