Interest Rate from Payment Calculator

About this calculator

This calculator solves the standard loan amortization formula in reverse — instead of computing a payment from a known rate, it starts from the loan amount, the monthly payment, and the term, and iteratively solves for the interest rate that makes those three numbers consistent (since the amortization equation cannot be algebraically rearranged to isolate rate directly, it is typically found using an iterative method like Newton-Raphson).

Borrowers use this to check what interest rate a lender, dealership, or private loan is actually charging when only the payment amount is advertised — a common practice in auto financing and rent-to-own or seller-financed deals where the effective rate is buried inside a monthly figure rather than disclosed upfront. It is also useful for verifying a loan offer's advertised APR, or for comparing an informal loan between individuals against market rates.

This calculator takes the loan amount, monthly payment, and term, then returns the implied annual interest rate the loan is actually carrying, so you can see the real cost of borrowing hidden behind a payment figure.