Interest rate vs APR — what’s the difference?
The interest rate is what you pay to borrow the money. The APR (annual percentage rate) rolls in the upfront costs of the loan — origination fees, discount points, and other lender charges — and expresses them as a single yearly rate. That makes APR the better number for comparing loan offers, because a low rate with high fees can cost more than a slightly higher rate with none.
Enter your loan amount, rate, term, and total upfront fees to see the real APR and how far above the headline rate it lands.
Why lenders quote the rate, not the APR
The interest rate is what sets your monthly payment, so it's the number that looks best in an ad. But two loans with the same rate can have very different fees. By law, US lenders must disclose the APR — use it to cut through marketing and compare the true cost of each offer.
How to use this comparison
- Get a Loan Estimate from each lender and enter the loan amount, rate, term, and total upfront costs here.
- Compare the resulting APRs — the lowest APR is usually the cheaper loan if you keep it to term.
- If you'll sell or refinance soon, a lower rate with higher fees may not pay off — weigh the break-even.