How this calculation works
Measure the cost of scheduled repayments relative to cash actually available after upfront fees. The EMI still comes from the quoted rate and stated principal, but the rate solver uses net proceeds as the initial cash inflow. The headline is an effective annual cash-flow rate, so it can exceed the quoted nominal rate even with no fees. It is not a certification of a jurisdiction’s disclosure convention.
Worked example
This example uses illustrative inputs. Your current result is shown above.
For ₹1,20,000 at 0% quoted interest over one year with ₹7,449.23 deducted upfront, net proceeds are ₹1,12,550.77 while twelve repayments remain ₹10,000 each. Solving those cash flows gives approximately 1% monthly, or 12.6825% effective annual APR. Finance cost is the ₹7,449.23 fee despite the zero quoted interest.
Assumptions and limits
- All upfront fees reduce proceeds at time zero; payments are equal and occur at monthly period-ends.
- Fees must be below principal. Irregular dates, recurring charges, refunds, floating rates and jurisdiction-specific inclusion rules are not handled; compare using the same annualisation convention.
Questions people ask
Why can APR exceed a zero advertised interest rate?
You can repay more than the cash actually received when fees are deducted upfront. The cash-flow rate captures that difference.
Is this the same as every lender’s published APR?
Not necessarily. This tool labels an effective compounded annual rate. Disclosure standards may specify different fee inclusions or annualisation; verify the convention before comparing.