Loan Interest Rate Calculator (Find the Rate from the Payment)
Enter the loan amount, the payment and the number of payments to find the rate you are paying.
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Loan Interest Rate Calculator (Find the Rate from the Payment) by TheCalcTools
How the Loan Interest Rate Calculator (Find the Rate from the Payment) works
The interest rate is the monthly rate j that makes the present value of the payments equal the amount borrowed: A = P × (1 − (1 + j)^−n) ÷ j. There is no algebraic solution, so the calculator finds j numerically and multiplies by 12 for the APR.
Use it to check dealer financing or buy-now-pay-later offers where only the payment is shown.
The formula
Worked example
Using the default values shown in the calculator:
| Amount borrowed (or cash price financed) | $20000 |
|---|---|
| Monthly payment | $470 |
| Number of monthly payments | 48 |
- Borrowing 20,000 and paying 470 a month for 48 months means an APR of 6.03.
- Total interest: $2,560.00.
Result:
| Interest rate (APR) | 6.03% |
|---|---|
| Effective annual rate | 6.20% |
| Total interest | $2,560.00 |
| Total of payments | $22,560.00 |
Frequently asked questions
The payment includes insurance or fees. Does that matter?
Yes. Add-ons included in the payment raise the rate this calculator finds, which is useful: it shows the true cost.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.