How the APR is worked out
The calculator finds the monthly rate at which your repayments are worth exactly the money you actually receive. Fees taken off the loan, or paid to get it, mean you receive less, so the rate is higher.
UK rules (FCA CONC App 1.2) turn that into an annual rate with compounding: APR = (1 + monthly rate)^12 − 1. So a loan charged at 7% a year, one twelfth a month, has an APR of 7.23% even with no fees.
Worked example
You borrow £10,000 over 5 years at £198.01 a month and pay a £250 arrangement fee. The APR is 8.37%. You repay £11,880.60 in total, so the total charge for credit is £2,130.60, interest plus the fee.
If you only know the rate, choose "The interest rate". At 7% with no fee the repayment is £198.01 and the APR is 7.23%.
APR or interest rate?
The interest rate is what the lender charges on what you owe. The APR adds compulsory fees and the effect of monthly compounding, so it's the figure to compare between UK lenders. A representative APR is what at least 51% of approved applicants get; your own rate can be higher.
What this calculator assumes
Equal monthly repayments for the whole term, a fixed rate and fees paid at the start. Optional extras such as payment protection aren't part of the APR, so leave them out. This is an estimate, not your lender's pre-contract information.
Borrowing in the US?
The country choices above the inputs open separate local pages. US lenders work the APR out differently: Regulation Z multiplies the monthly rate by 12 rather than compounding it, so the same loan shows a lower US APR. Choosing United States opens that page and resets the inputs; amounts are not converted.
For a loan from a US lender, use the US APR calculator in US dollars.
Inputs for the UK loan APR calculator
What do you know?
Pick the monthly repayment if it's on your quote, or the interest rate if that's all you have.
Amount borrowed
The full loan in pounds, before any fee is taken off.
Upfront fees
Arrangement or broker fees you must pay to get the loan. Enter 0 if there are none.
Monthly payment
The repayment from your quote or agreement.
Interest rate (per year)
The yearly rate, charged at one twelfth each month.
Term
How long you take to repay, in years. Half years such as 2.5 work.
CALCULATOR QUESTIONS
UK loan APR calculator questions
How do I calculate the APR on a loan?
Find the monthly rate at which the repayments pay off the money you receive after fees, then compound it over 12 months: (1 + monthly rate)^12 − 1.
Why is my APR higher than my interest rate?
Fees reduce the money you get, and UK APRs include monthly compounding. Both push the APR above the yearly interest rate.
What is the total charge for credit?
Everything you pay on top of the money you receive: interest plus compulsory fees. Lenders must show it before you sign.
Is the APR I'm offered the representative APR?
Not always. The representative APR only has to be given to at least 51% of successful applicants, so check the personal APR on your offer.