Skip to content
CalcGlass

Loans & Debt · Before Taking a Loan

APR Calculator — True Cost of a Loan

Find a loan's Annual Percentage Rate (APR): the true yearly cost once processing fees (with GST), documentation and other upfront charges are counted against the money you actually receive — the figure lenders must show in the RBI Key Facts Statement. Converts flat-rate offers into their real reducing-balance rate.

Your inputs

Quick start — try a typical case

₹ 5 lakh

% a year

Flat rate: interest on the full loan for the whole tenure — common in some personal, car and consumer loans.

months
% of loan

Documentation, stamp duty, bundled insurance — anything deducted from the loan or paid at the start.

Your result Live

APR (true yearly cost)

12.66%

vs 11.00% quoted — you receive ₹4,88,200 and repay ₹5,89,297

Monthly EMI
₹16,369
Total Interest
₹89,297
Fees and Charges
₹11,800 (fee ₹10,000 + GST ₹1,800)
Total Cost of Borrowing
₹1,01,097
Effective Annual Rate (compounded)
13.42%
  • Principal · 83%₹5,00,000
  • Interest · 15%₹89,297
  • Fees & charges · 2%₹11,800

Lenders must state the APR in the Key Facts Statement before you sign; compare offers on APR, not the headline rate.

How this is calculated

Find i so that Σ EMI ÷ (1 + i)ᵏ = loan − upfront fees (k = 1…n) · APR = i × 12 · Effective = (1 + i)¹² − 1

i
Monthly internal rate of return of the loan
Flat EMI
(P + P × r × years) ÷ months

A loan's headline rate ignores fees. If a ₹5 lakh loan has a ₹11,800 processing fee, you only receive ₹4.88 lakh but repay EMIs calculated on ₹5 lakh — so the rate you really pay is higher. APR finds the single yearly rate that links the money you received to the EMIs you pay, which makes loans with different fees and rate types comparable.

Assumptions & sources

  • All fees paid upfront (or deducted from the disbursal); EMIs monthly in arrears; no prepayment.
  • GST on processing fees at 18 %.
  1. 1Key Facts Statement (KFS) for Loans & Advances — includes the Annual Percentage Rate (APR); applies to retail and MSME term loans from 1 October 2024 — Reserve Bank of India (circular of 15 April 2024)
  2. 2Fair Practices Code for lenders — disclosure of all-in costs — Reserve Bank of India

Calculator ID LOAN-APR-001 · version 1.0.0

Common questions

What is APR?

The Annual Percentage Rate is the all-in yearly cost of a loan including processing fees and other charges, expressed as an interest rate. RBI requires lenders to show it in the Key Facts Statement.

Flat rate vs reducing rate — which is cheaper?

A flat rate charges interest on the full loan even as you repay it, so it's roughly twice as expensive as the same number on a reducing balance. 10 % flat over 3 years ≈ 17.6 % reducing.

Why is my APR higher than my interest rate?

Because fees reduce the money you actually get, while EMIs stay the same. The shorter the loan, the more a fixed fee raises the APR.