APR on a car loan

The note rate builds the car payment. The APR estimates lender fees paid up front and does not change the balance.

Same split as the mortgage

Principal and interest use the note rate. When the APR is higher, the difference is treated as a prepaid finance charge. The charge is not added to the amount financed.

If the APR equals the rate, the screen says the estimate shows no extra lender fees. Sales tax can still be inside the loan. Tax is not a lender fee.

What the fee is not

It is not the doc fee unless that fee is what lifted the APR. It is not registration. Read the dollar estimate as the size of the rate gap, then read the contract for the named charges.

A zero-percent note rate with a higher APR still produces a fee estimate. The payment itself has no interest. The cost of the “zero percent” deal may be the fee, or a higher price that you typed in the price field.

Use it in the comparison

Two zero-looking payments can hide different APRs. Enter both APRs before you call the payments equal.

Fees stay up front in the hold-period cost. They do not earn interest inside this schedule, because they were never added to principal.

This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.