Instalment Fee to Effective APR
The fee is charged on the full amount, but you only owe the shrinking balance. With the average balance near half, the effective rate lands close to double the quoted fee.
Your numbers
Effective APR
11.08%
Fee
72,000
Monthly payment
106,000
What it means
A quoted fee of 6% works out to an effective APR of about 11.08%.
Formula
Effective APR = Instalment fee × 2 × 12 ÷ (Instalments + 1)
The exact APR needs a cash-flow solve and this is an approximation — but it is enough to dispel the idea that 6% is cheap.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| AmountThe amount the calculation starts from — settle whether tax is inside it. | 1,200,000 | 0 and up |
| Instalment fee (%)The quoted instalment fee, charged on the full amount. | 6 | 0 ~ 50 |
| Instalments (mo)How many months to spread it over; longer means more fee in total. | 12 | 1 ~ 60 |
Step by step
Quick reference table
Results when only Instalment fee (%) changes and everything else stays put.
| Instalment fee (%) | Effective APR (%) | Fee | Monthly payment |
|---|---|---|---|
| 3 | 5.54 | 36,000 | 103,000 |
| 4.5 | 8.31 | 54,000 | 104,500 |
| 6 | 11.08 | 72,000 | 106,000 |
| 9 | 16.62 | 108,000 | 109,000 |
| 12 | 22.15 | 144,000 | 112,000 |
What each result means
| Result | At default values |
|---|---|
| Effective APR (%)The rate you really bear — close to double the quoted fee. | 11.08 |
| FeeThe fee charged, as money. | 72,000 |
| Monthly paymentWhat you owe every month. | 106,000 |
Common mistakes
The exact APR needs a cash-flow solve and this is an approximation — but it is enough to dispel the idea that 6% is cheap.
Glossary
- Amount
- The amount the calculation starts from — settle whether tax is inside it.
- Instalment fee
- The quoted instalment fee, charged on the full amount.
- Instalments
- How many months to spread it over; longer means more fee in total.
- Effective APR
- The rate you really bear — close to double the quoted fee.
- Fee
- The fee charged, as money.
- Monthly payment
- What you owe every month.
Frequently asked questions
QHow is Instalment Fee to Effective APR calculated?
Effective APR = Instalment fee × 2 × 12 ÷ (Instalments + 1) — The fee is charged on the full amount, but you only owe the shrinking balance. With the average balance near half, the effective rate lands close to double the quoted fee.
QCan you walk through an example?
With Amount 1,200,000, Instalment fee 6%, Instalments 12mo, the answer is Effective APR 11.08%.
QWhat do I need to enter?
Enter Amount, Instalment fee, Instalments. The result recalculates as you type, and an empty box counts as zero.
QHow much does the answer move if I change a number?
Changing only Instalment fee (%) moves the answer to Instalment fee (%) 3 → Effective APR (%) 5.54 and Instalment fee (%) 12 → Effective APR (%) 22.15. The table below lays out five steps.
QHow are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
QAnything to watch out for?
The exact APR needs a cash-flow solve and this is an approximation — but it is enough to dispel the idea that 6% is cheap.
Related calculators
Tax rates and interest conventions differ by country and product — check your contract for real transactions.