About this calculator
A flat rate charges interest on the original loan for the whole term, while you repay part of it every month. The APR here is the reducing-balance rate that gives exactly the same monthly payment, found by solving the loan formula for the rate. It is the fair number to compare offers by.
Worked example
A 100,000 loan at a 3.5% flat rate for 5 years costs 17,500 interest and 1,958.33 a month. The same payment on a reducing balance is a rate of 6.54%.
How to use the flat rate to apr calculator
- Enter the loan amount.
- Enter the flat rate (per year).
- Enter the term.
- Read the result — it updates as you type.
Frequently asked questions
Is there a quick rule of thumb?
For terms of a few years, the APR is roughly 1.8 to 1.9 times the flat rate. The exact figure depends on the term.
Does the APR include fees?
Not here. If a lender charges admin fees, the true cost is higher still; ask for the official APR, which must include them.