Why the APR can be so much higher than the rate
A flex line of credit can charge interest and a fee every day. Under Regulation Z the APR is the periodic rate multiplied by the number of periods in a year (12 CFR 1026.14(b)), so a daily fee is multiplied by 365. The APR for a line with an interest rate r and a daily fee f is r + f × 365.
Worked example: 24% interest plus a 0.7% daily fee
A line that charges 24% interest and a fee of 0.7% of the balance per day has an APR of 279.50%: 24% for interest plus 255.50 for the fee. On an average balance of $1,000 for 30 days the interest is $19.73 and the fee is $210.00, a total of $229.73, which is 22.97% of the balance. The 0.7% a day is an example to show the arithmetic, not a particular lender's price.
A short advance with one fee
For a single repayment the APR is fee ÷ advance × 365 ÷ days. A $20 fee on a $100 advance for 14 days is 521.43%. A $45 fee on $300 for 14 days is 391.07%, the figure NerdWallet's payday loan calculator gives. This is a simple annualisation, not an actuarial calculation.
A fixed-term loan with an origination fee
A $15,000 loan over 24 months at 12% has a payment of $793.07. With a 2% origination fee deducted, you receive $14,700 and the APR rises to 26.15%, which is 2.15 percentage points above the 12% rate.
What this calculator leaves out
It leaves out late fees, membership fees, a variable rate and charges that Regulation Z may exclude from the APR. A lender's APR follows the rules for its product, so the figure on your agreement is the one that counts. The results are estimates for comparing offers.
To work out the payment on an instalment loan and the saving from paying off early, use the flex loan calculator.
To solve the APR from a lender's payment offer, use the business loan APR calculator.
Use the right country page
This page uses dollars and shows the APR as a nominal rate. The country choices above the inputs open separate local pages. Choosing United Kingdom opens the UK flex loan APR calculation explanation, which shows an effective annual rate for a fixed-term loan or a short advance. Inputs reset and amounts are not converted.
Inputs for the flex loan APR calculator
Type of flexible credit
Choose a fixed-term loan, a line of credit with a daily fee, or a single fee on a short advance.
Amount borrowed or average balance
The loan or advance, or your average daily balance on a line of credit.
Interest rate
The yearly rate before the fee, as a percentage.
Term
The months you take to repay the loan. A whole number up to 120.
Origination fee
A percentage of the loan, deducted from the cash you receive. Enter zero if none.
Fee per day
A percentage of the balance charged every day, on top of the interest.
Fee
The single fee charged for the advance.
Days
How many days the balance or advance is outstanding. A whole number up to 365.
CALCULATOR QUESTIONS
US flex loan APR calculator questions
How is the APR of a line with a daily fee worked out?
APR = interest rate + daily fee × 365. 24% plus 0.7% a day is 279.50%.
How is the APR of a short advance worked out?
Fee ÷ advance × 365 ÷ days. $20 on $100 for 14 days is 521.43%.
Why does a fee make the APR of a term loan higher?
It reduces the cash you receive. A 2% origination fee lifts a 12% rate to 26.15%.
Is a 0.7% daily fee realistic?
It is an example chosen to show the arithmetic. Check your agreement for the fee and rate that apply.
Is the APR nominal or effective?
Nominal: the periodic rate times the number of periods in a year, as Regulation Z defines it.