APR Calculator will allow you to calculate
the annual percentage rate (true cost) of your loan
This apr calculator will easily calculate the annual percentage rate on any type of loan! Shopping for a mortgage loan and comparing mortgage lenders can be confusing. How do you know if you are getting the best deal? One lender charges up-front fees but has a good rate. Another charges very little fees, but has a slightly higher interest rate. The Annual Percentage Rate, or APR, provides a way to compare different loan pricing structures used by lenders. Your loan payment will be based on an interest rate determined by your lender. Your lender may also charge you fees for the privelege of borrowing the money. The Annual Percentage Rate (APR) takes into consideration that you have to pay money in order to borrow money. For example, let's say you borrow $100,000 for a 30-year mortgage loan and Lender A is charging you an interest rate of 7%. Lender A however, will charge you $2,000 in fees for the loan. Since you would have to pay $2,000 in order to get $100,000, you are really only increasing your cash position by $98,000 (100,000 - 2,000). However, you are still making loan payments based on a $100,000 loan, so your 'effective interest rate' (Annual Percentage Rate) will be higher than the stated rate on your loan. In this instance the Annual Percentage Rate (APR) would be 7.202%. Lender B also offers a 7% interest rate, and does not charge any fees. Instead Lender B would require you to pay 3 points (a point is one percent of the loan amount, in this case 3%. Since 3% of $100,000 is $3,000, you would only increase your cash position by $97,000 (100,000 - 3,000), but would still have to repay a $100,000 loan. In this case your Annual Percentage Rate (APR) would be 7.305%. In this situation Lender A has the better deal since an APR of 7.202% is lower than an APR of 7.305%. As you can see, the more costs that you have to pay to get a loan, the higher the Annual Percentage Rate (APR) will be. Since a lender's pricing structure for a mortgage loan is typically not this simple, knowing the Annual Percentage Rate (APR) becomes extremely helpful. You can use this apr calculator to calculate the Annual Percentage Rate (APR) for any loan.
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If you are falling behind on your mortgage payments and are concerned that you may lose your home, consider getting a mortgage modification to lower your monthly mortgage payments.
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