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Use the amount from the same quote as the payment schedule.
$
Enter 0 when the quote has no charge to include.
$
Match how the entered charge affects the borrower cash flow.
Use the recurring payment from the quote, before any optional final-payment adjustment.
$
Enter the number of equal periods and the frequency used in the quote.
Leave at $0.00 for the regular payment; enter the disclosed last installment only when it differs.
$
Use 0% to omit the comparison or enter the advertised yearly interest rate.
% / year
MeasureValueComparison useCopy
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Quote review

Cash-flow checks

Use these figures to confirm that every amount came from the same offer.
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What drives the estimate

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How to compare offers

Match loan amount, fee treatment, payment timing, and final installment before treating an APR difference as a price difference.

Disclosure limit

This regular-period actuarial estimate does not implement every Regulation Z timing, fee-inclusion, product, or tolerance rule. Use the creditor's official disclosure for a legal APR.

Rate comparison

Compare the modeled nominal APR with its compound annual equivalent and, when entered, the quoted note rate.

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A loan with the lowest advertised interest rate is not always the least expensive offer. Required charges can reduce the cash a borrower receives or increase the payments that must be repaid. Annual percentage rate, or APR, converts that full payment pattern into a yearly rate for comparing borrowing cost.

The note rate and APR answer different questions. The note rate governs interest on the outstanding principal. APR reflects the timing of payments and finance charges included in the credit transaction. When fees are deducted at funding, the borrower receives less usable cash while repaying the scheduled installments, so the implied rate can rise even though the note rate does not change.

MeasureWhat it describesWhat it can miss
Note rateContract interest rate applied to the loan balance.Upfront charges and the full payment timing.
APRAnnualized borrowing cost implied by amount financed and scheduled payments.Optional costs and future changes not included in the disclosed transaction.
Effective annual rateAnnual growth equivalent after compounding the solved periodic rate.It is not the same disclosure convention as nominal APR.
Total finance chargeTotal payments minus the cash basis used in the model.It is a dollar amount, not a time-adjusted rate.

Regular closed-end installment loans are the clearest fit. Auto, personal, and equipment-loan quotes often provide a face amount, fixed payment, number of equal periods, and disclosed final installment. The comparison becomes less reliable when payment dates are irregular, rates can change, fees are optional or misclassified, or the first period differs from the rest.

Fee treatment matters because it changes the borrower's cash-flow basis. A prepaid charge is deducted from proceeds. A financed charge is assumed to be represented inside the payment stream while the borrower receives the full entered loan amount. Entering the same fee both ways double-counts it; omitting a required finance charge can understate the modeled APR.

APR is a comparison aid rather than a complete affordability measure. Two offers can have similar APRs but different payment amounts, loan terms, prepayment rules, collateral risk, or variable-rate exposure. Compare disclosures for the same credit product and term, then inspect the dollar cost and payment schedule as well as the rate.

Regulated APR calculations also follow product-specific rules about which charges count, timing conventions, tolerances, and irregular periods. A lender's current Truth in Lending disclosure remains authoritative for a covered transaction; an independent estimate is best used to catch inconsistent quote inputs or ask better questions.

How to Use This Tool:

Copy all values from one quote so the loan amount, charge treatment, and payment stream describe the same transaction.

  1. Enter the Loan amount and any Upfront finance charges. Choose whether those charges are prepaid or already financed in the scheduled payments.
  2. Enter the Scheduled payment, Payment schedule count, and matching frequency. The available frequencies are monthly, semimonthly, biweekly, weekly, and quarterly.
  3. Add a Custom final payment only when the disclosed last installment differs from the regular payment. Enter the Quoted note rate when you want a comparison; it does not alter the APR solution.
  4. Review Cost ledger for net proceeds, solved rates, payments, and finance charge. Use Quote review to confirm fee treatment before comparing the modeled APR with the lender's disclosure.

Interpreting Results:

Modeled nominal APR is the main comparison result. The Effective annual rate compounds the solved periodic rate for a full year, so it is normally higher when the periodic rate is positive. Do not compare one offer's effective annual rate with another offer's nominal APR.

The note-rate comparison is descriptive. A difference within 0.25 percentage points is labeled closely aligned. A modeled APR more than 0.25 percentage points above the note rate is labeled APR above note rate; a lower result is labeled APR below note rate. These are review cues, not regulatory tolerance decisions.

  • A higher APR after selecting prepaid treatment is expected when the charge reduces net proceeds.
  • A modeled APR below the quoted note rate can indicate inconsistent payment inputs, omitted installments, unusual timing, or a fee treatment that does not match the quote.
  • Use the lender's official APR for signing or compliance decisions. Recheck the amount financed, included charges, payment frequency, and final installment when the values disagree.

Technical Details:

APR for a regular payment stream is an internal rate of return. The periodic rate is the nonnegative rate that makes the present value of all end-of-period payments equal to the net proceeds received by the borrower.

Formula Core

For n payments, net proceeds P equal the discounted payment stream. The final term may use a different installment.

P= ∑t=1n At(1+r)t

P is the loan amount minus prepaid charges, or the full loan amount when charges are financed. At is each scheduled payment, r is the solved periodic rate, and n is the number of installments. A bounded binary search solves r; if total payments equal net proceeds, r is zero. If total payments are lower than net proceeds, the nonnegative-rate model has no solution.

Nominal APR and effective annual rate then use the number of payment periods per year:

Nominal APR=r×m×100% Effective annual rate=[(1+r)m-1]×100%

m is 12 for monthly, 24 for semimonthly, 26 for biweekly, 52 for weekly, or 4 for quarterly payments. Calculations retain full precision; displayed currency rounds to cents, nominal and effective annual rates to two decimals, and the periodic rate to four decimals.

Derived cost measures

MeasureCalculation
Total paymentsSum of all installments, including the custom final payment when supplied.
Modeled finance chargeTotal payments minus net proceeds.
Upfront charge shareUpfront charges divided by loan amount × 100.
Repayment cost shareModeled finance charge divided by net proceeds × 100.
APR minus note rateDifference in percentage points; omitted when the quoted note rate is zero.

Loan amount and recurring payment accept $0.01 to $1,000,000,000. Charges and a custom final payment accept $0 to $1,000,000,000, payment count accepts 1 to 600 whole periods, and the optional quoted note rate accepts 0% to 1,000%. Prepaid charges must remain below the loan amount so net proceeds stay positive.

Limitations:

This is an educational cash-flow estimate, not financial or legal advice and not a lender disclosure.

  • Payments are assumed to occur at equal intervals and at the end of each period. Exact dates, odd first periods, variable rates, payment holidays, and day-count conventions are not modeled.
  • Only the final installment can differ from the recurring payment. Other irregular cash flows need a fuller dated-cash-flow calculation.
  • The borrower must decide which charges belong in the finance-charge basis. Product, jurisdiction, and disclosure rules can change that classification.
  • The currency symbol is fixed to U.S. dollars and no exchange-rate conversion occurs.

Worked Examples:

The same charge with two treatments

A $10,000 loan repaid with 36 monthly payments of $322 produces different results depending on a $300 charge. When the charge is prepaid, net proceeds are $9,700 and modeled nominal APR is about 11.96%. When the charge is treated as financed, net proceeds remain $10,000 and the same payment stream implies about 9.86%. The comparison shows why fee treatment must match the quote rather than being chosen to produce a preferred rate.

References: