WattShed Effective
What the financing really costs, against the cash price.
Enter the cash price, the financed price, the advertised APR, and the term from an offer you already have. This is arithmetic on the numbers you enter, computed in this browser; nothing you enter is stored or sent anywhere.
The effective rate answers one question: what rate would produce this same monthly payment on the cash price instead of the financed price. A gap between the financed price and the cash price is common in financed home-improvement offers, and that gap is exactly what this makes visible.
Informational only. This is not lending, tax, or legal advice, not an offer, and not a statement about any particular lender.
Check an offer
The numbers from the offer
Enter the cash price, the financed price, the advertised APR, and the term straight off an offer you already have. Nothing here is prefilled.
Result
Enter the cash price, the financed price, the advertised APR, and the term on the left to see a result.
Arithmetic over the offer numbers you entered above. Informational only, not lending, tax, or legal advice, not an offer, and not a statement about any particular lender.
How the gap forms
Why the advertised rate can understate it.
The financed price vs the cash price
A financed home-improvement offer often carries a higher sticker price than the same job paid in cash. That difference is the embedded markup, and it rides silently inside the monthly payment unless someone runs the math against the cash price instead.
Fees that ride along monthly
A servicing or program fee added on top of the loan payment raises what actually leaves the account every month without changing the APR printed on the offer. Leave it out of the math and part of the true cost stays hidden.
Rate vs true cost
The advertised APR is calculated on the financed price, not the cash price. Solve for the rate that produces the same payment on the cash price instead, and that effective rate is what the financing actually costs.
A low effective rate here doesn't make an offer a good deal in every sense, and a high one doesn't make it fraudulent. It confirms only what rate, against the cash price, produces the payment on the offer you entered.