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APR Calculator

Find a loan’s annual percentage rate after processing fees and other charges, the way RBI’s Key Facts Statement does.

By Nitin Raturi · Last reviewed

Your loan

How to use the APR Calculator

Find the true annual cost of a loan once its upfront charges are counted.

  1. Enter the loan amount, interest rate and tenure.
  2. Add up every upfront charge from the Key Facts Statement and enter the total.
  3. Read the EMI, the amount you actually receive and the APR.

Good to know

  • Compare loans by APR, not by the quoted rate.
  • With no charges, the APR equals the quoted rate.

Loan amount

The sanctioned amount the EMI is worked out on, before any charges are taken off.

How to fill it in

  • Enter ₹1,000 to ₹10 crore.
  • Accepts 5 lakh, 5L or 500000.

Interest rate

The rate the lender quotes, on a reducing balance.

How to fill it in

  • Enter 0% to 50% a year.
  • For a flat rate, convert it first with the flat vs reducing rate calculator.

Example

A “0%” loan of ₹3 lakh for 12 months with a ₹3,000 fee has an APR of 1.86%.

Tenure

The number of monthly EMIs.

How to fill it in

  • Enter 1 to 360 months.

Upfront charges

Everything deducted or paid at the start: processing fee with GST, insurance and other fees.

How to fill it in

  • Enter the rupee total, from ₹0 to less than half the loan.
  • Your Key Facts Statement lists these charges.

Example

RBI’s own example: ₹400 of charges on ₹20,000 at 15% gives an APR of 17.07%.

Tip: A 2% fee plus GST on a ₹5 lakh, 5-year loan at 11% lifts the APR to 12.05%.

Annual percentage rate

APR 17.07%

You receive ₹19,600 and repay ₹969.73 a month for 2 years. Counting the charges, the loan costs 17.07% a year, against the quoted 15%.

EMI
₹969.73
Total interest
₹3,274
Interest plus charges
₹3,674
As an effective annual rate
18.47%

APR as in RBI’s Key Facts Statement rules: 12 × the monthly IRR on the net disbursed amount, reducing balance. The EMI is not rounded to the rupee; charges are all paid at the start.

ChangelogHow we test this calculatorEmbed this calculator

How this calculator works

  1. Step 1EMIon the full loanSet at the quoted reducing-balance rate.
  2. Step 2Net amountloan − chargesWhat actually reaches you.
  3. Step 3APR12 × monthly IRRThe rate that matches EMIs to the net amount.

Lenders work out your EMI on the full loan, but charges such as the processing fee come off the top. You pay interest on money you never received.

The APR is the rate that makes the EMIs worth exactly what you received. RBI requires lenders to show it in the Key Facts Statement for retail and MSME loans.

Worked example: RBI’s own illustration

₹20,000 at 15% for 24 months, ₹400 of charges
APR
12 × r, where EMIs at r are worth the net amount
  1. EMI₹20,000 at 15% ÷ 12, 24 months₹969.73
  2. Total interest₹3,274
  3. Net disbursed₹20,000 − ₹400₹19,600
  4. APR17.07%

This is the illustration in Annex B of RBI’s Key Facts Statement circular, which also reaches 17.07%. The quoted 15% understates the cost by about two points.

Read the result

  • RBI example: 15% quotedAPR 17.07%
  • ₹5 lakh: 11% quotedAPR 12.05%
  • “0%” loan, 1% feeAPR 1.86%
Quoted rate and APR for three loans

A “0%” loan of ₹3 lakh for a year with a ₹3,000 fee still costs 1.86% a year.

Nominal APR and effective rate

  • APR (RBI)17.07%Monthly IRR × 12, as the Key Facts Statement shows it.
  • Effective rate18.47%Monthly IRR compounded over 12 months.

Assumptions and limits

  • Upfront chargesProcessing fee, GST, insurance and other fees at the start.
  • Monthly EMIsEqual EMIs from one month after disbursal.
  • Contingent chargesLate fees and prepayment charges are not part of APR.
  • Unrounded EMILenders often round the EMI, which shifts APR slightly.

Comparing loan offers

APR puts fees and interest into one yearly rate, so two offers can be compared on the same basis.

If a lender quotes a flat rate, convert it first with the flat vs reducing rate calculator. The EMI calculator gives the monthly payment, and the interest rate calculator finds a rate from a payment.

Common mistakes

  • Mistake: Comparing loans by quoted rate only.

    Instead: Compare APRs; fees can reverse the ranking.

  • Mistake: Leaving out GST on the processing fee.

    Instead: Enter the fee including GST.

  • Mistake: Treating a no-cost EMI as free.

    Instead: Any fee gives it a positive APR.

Checking the method

A separate script re-works every golden value with a month-by-month EMI search and Newton’s method for the IRR, and reproduces RBI’s 17.07% example.

Read how we test our calculators, or browse more money calculators.

Frequently asked questions

What is APR on a loan?

The annual cost of credit including charges. RBI’s example of ₹20,000 at 15% for 24 months with ₹400 of charges has an APR of 17.07%.

How is APR calculated in India?

RBI’s Key Facts Statement rules compute it on the net disbursed amount using the IRR approach on a reducing balance. This calculator does the same.

How much does a processing fee add?

A ₹11,800 fee (2% plus GST) on a ₹5 lakh loan at 11% for 5 years lifts the APR to 12.05%.

Can a 0% loan have an APR above zero?

Yes, if there is a fee. ₹3 lakh at 0% for 12 months with ₹3,000 of charges has an APR of 1.86%.

Why is the effective rate higher than the APR?

The APR multiplies the monthly rate by 12; the effective rate compounds it. In RBI’s example that is 18.47%.

Sources and methodology

The formulas are standard time-value-of-money results. We check every figure against golden values worked out independently, by closed form and by month-by-month simulation; see the methodology.

Written and maintained by Nitin Raturi, a software engineer (about the author). Last reviewed 4 Nov 2026; next review due by . Found an error? Tell us.

Changelog

  • : Initial release.