Identify the loan amount, interest rate, fees, and repayment term
Use the lender’s APR formula or APR calculator
Include all mandatory loan fees in the calculation
Convert the total cost of borrowing into an annual rate
Compare the APR shown in the loan disclosure or agreement
Check the Truth in Lending disclosure for the APR
Use the formula: APR = periodic rate × number of periods per year
Adjust for fees by adding them to the loan cost before annualizing
Verify the APR with a financial calculator or spreadsheet
Compare APRs across loans with the same term and amount