APR (FİFD) Calculator
Enter the loan amount, term, nominal interest, commission and other costs — the loan's annual percentage rate (APR/FİFD) is calculated.
APR (FİFD) calculator
Calculation of the annual percentage rate (effective interest).
The APR is based on the loan's real cash flow: the one-time commission and other costs are deducted from the amount on the day the loan is issued. The effective monthly rate is found using the internal rate of return (IRR) method and annualized.
What is APR (FİFD)?
APR (Annual Percentage Rate — in Azerbaijani, FİFD) is an indicator that reflects the real cost of a loan. Unlike the nominal interest rate, APR takes into account not only the interest but also one-time commissions and other mandatory costs. For this reason, even if two loans have the same nominal rate, their APRs may differ depending on the costs.
Why does APR differ from the nominal rate?
The nominal rate is only the annual interest calculated on the loan amount. But in reality the borrower, because of commission and other costs, receives not the full loan amount but a smaller net amount, while payments are calculated on the full amount. APR reflects precisely this real situation and shows the true expensiveness of the loan.
How is APR calculated? (methodology)
This calculator does not use a simplified interest-summing approach. First the monthly payment (annuity) is calculated based on the nominal rate. Then the net amount the borrower actually receives on the day the loan is issued is determined: loan amount − commission − other costs. Next, based on the real cash flow, using the internal rate of return (IRR/XIRR-type) method, the effective monthly rate is found such that the present value of the monthly payments equals precisely this net amount. Finally, the effective monthly rate is annualized: APR = (1 + i)¹² − 1.
How to use the calculator?
Enter the loan amount, term (months), nominal interest, one-time commission and other mandatory costs. The result shows the monthly payment, the net amount received, the total cost of the loan and the APR indicator. APR is the most correct way to compare different bank offers on the same criterion.
Frequently asked questions
Why is APR higher than the nominal rate?
Because commission and additional costs increase the real cost of the debt, APR is usually higher than the nominal rate. When costs are zero, APR approaches the nominal effective rate.
Which indicator should I look at to compare loans?
When comparing different offers you should look at the APR, not the nominal rate, because it covers all costs.
Is the result the same as the bank's official APR?
The result is approximate and calculated by methodology. The bank's official APR may differ slightly depending on additional cost components.
Note: This calculator and information are for estimation and informational purposes only and are not legal or tax advice. For accurate calculations and official confirmation, consult official sources or a specialist.