A walkthrough, end to end.
- 1
Enter the loan principal, monthly payment, and number of months.
- 2
The calculator uses bisection to solve for the APR that produces that exact payment.
- 3
Compare against the lender's quoted rate — useful when fees are baked into the payment.
Solve PMT for the rate
Given P, PMT and n, find r such that PMT × (1−(1+r)⁻ⁿ)/r = P. No closed-form solution exists, so we iterate (bisection) until convergence. Same approach used inside Excel's RATE function.
What you can do with this.
Verify a lender's quoted rate
Lender quotes "$X/month over Y months for $Z loan". Plug into the calculator to back-out the implied APR. If different from the quoted rate, fees are baked in — compare on APR for true cost.
Auto loan implied rate
Dealer quotes a monthly payment with no rate disclosed. Compute the implied APR — useful when comparing dealer financing against pre-approved credit-union offers on equal terms.
Lease implied rate
Lease deals quote money factor or monthly payment. Compute implied rate to compare against straight financing. Often surprises buyers about how cheap (or expensive) a lease really is.
Buy-here-pay-here (BHPH) auto loans
BHPH dealers often hide high APRs behind 'easy' weekly payments. Plug the numbers into the calculator — many BHPH loans run 20–30% effective APR. Caveat emptor.
Salesperson 'good deal' check
Any time someone says 'just $X per month for Y years', compute the implied rate. If it's above what your bank or credit union would charge, you're paying for the convenience.
Mortgage solver
Given mortgage payment, loan, and term, find the rate. Useful when comparing assumable mortgages or back-checking refinance quotes.
Personal loan rate verification
Online lenders sometimes show payment + term but not APR clearly. Computing implied APR is the apples-to-apples comparison.
Interest rate calculator 2026 — what's current
TILA and Regulation Z require lenders to disclose APR, but disclosures aren't always prominent. Always solve for APR yourself when shopping rates — gets you to honest comparison faster.
Frequently asked.
Because some lenders bury fees and origination costs in the payment. Solving for rate from the payment captures the true effective cost — what TILA calls APR.
Almost — APR by federal definition includes specific fees on top of base rate. This calculator solves for the implicit interest rate from cash flows, which equals APR when fees are zero.
Bisection over a 0%-100% APR range until precision is 0.0001%. Same accuracy as Excel's RATE function. Should match lender disclosures within a basis point.
No. Calculations run entirely in your browser.