Effective APR (RRSO) Calculator

RRSO is the effective annual percentage rate — a figure showing the total cost of a loan over a year, expressed as a percentage. It includes the nominal interest rate as well as commissions and mandatory fees, letting you compare offers on a common basis.

The nominal rate is just the interest on the borrowed capital. RRSO is usually higher because it also reflects commissions and the frequency of payments. A loan with a low nominal rate but a high commission can have a higher RRSO than one with a higher rate and no commission.

It first finds the annuity payment, then uses bisection to find the monthly internal rate of return at which the discounted sum of payments equals the amount actually disbursed (loan minus commission). RRSO = ((1 + r)^12 − 1) × 100.

A commission deducted upfront reduces the amount you actually receive, even though payments are based on the full loan amount. You therefore pay more for a smaller real sum, which increases the effective cost of credit.

For the same commission, a longer term usually lowers the RRSO because the one-off commission is spread over more payments. However, a longer term means more interest overall, so the total cost in currency rises.

It is the sum of all costs above the borrowed capital: interest plus commissions and fees. In this calculator: total cost = total payments − loan amount + commission. It is expressed in currency, unlike RRSO which is a percentage.

It is a fixed monthly payment for the whole loan term. Early on most of it is interest; over time the capital share grows. The formula is payment = amount × i / (1 − (1 + i)^−n), where i is the monthly rate and n the number of months.

No. The calculator is for informational purposes. The actual RRSO quoted by a lender may include extra fees and differ from this tool. Always check the RRSO in the lender's standard information sheet before signing.