Interest rate vs. APR
The interest rate is the price of the money alone. The APR (annual percentage rate) also includes fees, so it reflects the real cost. Lenders in the US must disclose it; in Spain the equivalent is the TAE. A 5-year loan at 7.5% with a 1.5% origination fee has an APR of about 8.5%.
To compute it, the calculator finds the rate that equates the money you actually receive (amount minus fee) with the payments you make.
What to check before signing
Always compare APRs, not rates or monthly payments. A longer term lowers the payment but drives up total interest. Check for prepayment penalties and for add-ons such as credit insurance, which raise the cost without showing up in the rate.
Auto loans
In the US, new-car loans typically run 6–8% APR and used-car loans often exceed 10%. From 2025 to 2028, interest on loans for new vehicles assembled in the US is deductible up to $10,000 a year on your federal return, subject to income limits. In Latin America rates vary widely by country and lender: use the local currency and compare at least three offers.