Free Tool
APR vs Factor Rate Converter
Convert between APR and factor rates to compare different loan offers apples-to-apples. Understand the true cost of different financing options.
$
1.101.60
3 months60 months
Approximate APR
0.0%
Loan Amount$100,000
Total Cost of Financing$0
Monthly Payment$0
Total Repayment$100,000
* Conversions are approximate. APR calculations assume equal monthly payments. Actual APR may vary based on fee structure and payment timing.
Understanding Factor Rates vs APR
Factor Rates
- What it is: A multiplier applied to your loan amount
- Example: $100K × 1.25 = $125K total repayment
- Used by: MCAs, short-term loans
- Pros: Simple to calculate total cost
- Cons: Hard to compare to APR products
APR (Annual Percentage Rate)
- What it is: Annualized cost including fees
- Example: 20% APR on a 1-year $100K loan
- Used by: Banks, term loans, SBA loans
- Pros: Standard comparison metric
- Cons: Can be misleading for short terms
Important Note
A factor rate of 1.25 on a 6-month term has a much higher APR than the same factor on a 12-month term. Always consider the term length when comparing offers. The best comparison is total cost of financing relative to how long you'll have the money.