Finding the Rate Hidden in a Payment

This interest rate calculator reverses the annuity formula. Instead of computing a payment from an interest rate, it solves for the monthly rate that produces the payment you actually pay on a loan of a known amount and term. The solution is unique because the payment function increases monotonically with the rate.

APR vs Effective Annual Rate

APR is the quoted simple annual rate — the monthly rate multiplied by twelve. The effective annual rate (EAR) compounds the monthly rate over a year, so it is the more honest measure of true annual cost whenever interest compounds monthly.

Verifying a Lender's Quote

Enter the amount, payment, and term from any loan offer to see whether the implied APR matches what was advertised. A higher implied rate than quoted means fees are embedded in the payment — a useful check before signing.