Debt PayoffGuide
APR vs. Interest Rate on a Loan: What's the Difference and Why APR Is Higher
A 16% interest rate can be a 19.5% APR once fees are added. Here's the difference, the math behind it, and how to compare loan offers the right way.
Loan Calculator
Estimate the monthly payment, total interest, and full repayment schedule for any fixed-rate personal loan. Adjust the amount, rate, and term — the figures update instantly, and you can export the schedule to Excel or share it with a link.
Monthly payment
$525.05
- Total of payments
- $31,502.79
- Total interest
- $6,502.79
- Loan amount
- $25,000.00
$
%
months
5 yrPayment breakdown over time
How this is calculatedmethodology
Each month, interest is charged on the remaining balance and the rest of your payment reduces the principal, so the balance falls a little faster every month.
M = P · r · (1 + r)ⁿ / ((1 + r)ⁿ − 1)
- P
- Loan amount.
- r
- Monthly interest rate = annual rate ÷ 12.
- n
- Number of monthly payments.
- Fixed rate
- Equal monthly payments
View full amortization schedule60 months
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $525.05 | $327.13 | $197.92 | $24,672.87 |
| 2 | $525.05 | $329.72 | $195.33 | $24,343.15 |
| 3 | $525.05 | $332.33 | $192.72 | $24,010.82 |
| 4 | $525.05 | $334.96 | $190.09 | $23,675.86 |
| 5 | $525.05 | $337.61 | $187.43 | $23,338.25 |
| 6 | $525.05 | $340.29 | $184.76 | $22,997.96 |
| 7 | $525.05 | $342.98 | $182.07 | $22,654.98 |
| 8 | $525.05 | $345.69 | $179.35 | $22,309.29 |
| 9 | $525.05 | $348.43 | $176.62 | $21,960.86 |
| 10 | $525.05 | $351.19 | $173.86 | $21,609.67 |
| 11 | $525.05 | $353.97 | $171.08 | $21,255.70 |
| 12 | $525.05 | $356.77 | $168.27 | $20,898.92 |
| 13 | $525.05 | $359.60 | $165.45 | $20,539.33 |
| 14 | $525.05 | $362.44 | $162.60 | $20,176.88 |
| 15 | $525.05 | $365.31 | $159.73 | $19,811.57 |
| 16 | $525.05 | $368.20 | $156.84 | $19,443.37 |
| 17 | $525.05 | $371.12 | $153.93 | $19,072.25 |
| 18 | $525.05 | $374.06 | $150.99 | $18,698.19 |
| 19 | $525.05 | $377.02 | $148.03 | $18,321.17 |
| 20 | $525.05 | $380.00 | $145.04 | $17,941.17 |
| 21 | $525.05 | $383.01 | $142.03 | $17,558.15 |
| 22 | $525.05 | $386.04 | $139.00 | $17,172.11 |
| 23 | $525.05 | $389.10 | $135.95 | $16,783.01 |
| 24 | $525.05 | $392.18 | $132.87 | $16,390.83 |
| 25 | $525.05 | $395.29 | $129.76 | $15,995.54 |
| 26 | $525.05 | $398.42 | $126.63 | $15,597.13 |
| 27 | $525.05 | $401.57 | $123.48 | $15,195.56 |
| 28 | $525.05 | $404.75 | $120.30 | $14,790.81 |
| 29 | $525.05 | $407.95 | $117.09 | $14,382.86 |
| 30 | $525.05 | $411.18 | $113.86 | $13,971.67 |
| 31 | $525.05 | $414.44 | $110.61 | $13,557.24 |
| 32 | $525.05 | $417.72 | $107.33 | $13,139.52 |
| 33 | $525.05 | $421.03 | $104.02 | $12,718.49 |
| 34 | $525.05 | $424.36 | $100.69 | $12,294.13 |
| 35 | $525.05 | $427.72 | $97.33 | $11,866.42 |
| 36 | $525.05 | $431.10 | $93.94 | $11,435.31 |
| 37 | $525.05 | $434.52 | $90.53 | $11,000.79 |
| 38 | $525.05 | $437.96 | $87.09 | $10,562.84 |
| 39 | $525.05 | $441.42 | $83.62 | $10,121.41 |
| 40 | $525.05 | $444.92 | $80.13 | $9,676.49 |
| 41 | $525.05 | $448.44 | $76.61 | $9,228.05 |
| 42 | $525.05 | $451.99 | $73.06 | $8,776.06 |
| 43 | $525.05 | $455.57 | $69.48 | $8,320.49 |
| 44 | $525.05 | $459.18 | $65.87 | $7,861.32 |
| 45 | $525.05 | $462.81 | $62.24 | $7,398.51 |
| 46 | $525.05 | $466.48 | $58.57 | $6,932.03 |
| 47 | $525.05 | $470.17 | $54.88 | $6,461.86 |
| 48 | $525.05 | $473.89 | $51.16 | $5,987.97 |
| 49 | $525.05 | $477.64 | $47.40 | $5,510.33 |
| 50 | $525.05 | $481.42 | $43.62 | $5,028.91 |
| 51 | $525.05 | $485.23 | $39.81 | $4,543.67 |
| 52 | $525.05 | $489.08 | $35.97 | $4,054.60 |
| 53 | $525.05 | $492.95 | $32.10 | $3,561.65 |
| 54 | $525.05 | $496.85 | $28.20 | $3,064.80 |
| 55 | $525.05 | $500.78 | $24.26 | $2,564.02 |
| 56 | $525.05 | $504.75 | $20.30 | $2,059.27 |
| 57 | $525.05 | $508.74 | $16.30 | $1,550.53 |
| 58 | $525.05 | $512.77 | $12.27 | $1,037.75 |
| 59 | $525.05 | $516.83 | $8.22 | $520.92 |
| 60 | $525.05 | $520.92 | $4.12 | $0.00 |
How to use the loan calculator
- Enter the loan amount, annual interest rate (APR), and term in months.
- Read your monthly payment and the total interest over the life of the loan.
- Open the amortization schedule to see your balance fall month by month.
TipA shorter term means a higher monthly payment but far less total interest.
How to use the loan calculator
Enter the loan amount you want to borrow, the annual interest rate your lender quoted, and the term in months. The large readout shows your fixed monthly payment, and the cells below break out the total of all payments, the total interest you will pay, and the original loan amount. The hint under the term field converts your months into years so the length is easy to picture.
Open the amortization schedule to see exactly how each month splits between interest and principal, and how your balance falls over time. Early payments lean heavily toward interest; later payments are mostly principal. Use the export buttons to download the full schedule as a real Excel workbook or CSV, print it to PDF, or copy a link that reopens the calculator with your exact numbers.
How it works and what the number means
A fixed-rate loan is an amortizing loan: you pay the same amount every month, but the portion going to interest shrinks as your balance falls, so more of each payment chips away at the principal. The monthly payment is the level amount that brings your balance to exactly zero at the end of the term.
The biggest levers on what you pay are the interest rate and the term. A lower rate or a shorter term cuts the total interest, sometimes dramatically, while a longer term trades a smaller monthly payment for more interest over the life of the loan. Use this estimate to compare offers and decide how much loan comfortably fits your budget before you sign.
Estimates for education only — not a loan offer or financial advice. Actual payments depend on your lender, credit, fees, and terms.
Frequently asked questions
How is my monthly loan payment calculated?
It uses the standard amortization formula M = P·r·(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. The result is the fixed payment that fully repays the loan over the term you enter.
What is the difference between the interest rate and APR?
The interest rate is the cost of borrowing the principal, while the APR also folds in certain lender fees, so it reflects the true yearly cost of the loan. This calculator works from the interest rate you enter; if your lender quoted an APR, you can enter that figure to get a more all-in estimate.
Does a shorter term save money?
Usually, yes. A shorter term means fewer payments and less time for interest to accrue, so you pay less total interest — but each monthly payment is larger. A longer term lowers the monthly payment but raises the total interest. Try different term lengths and watch the total-interest figure change.
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