The annual percentage rate (APR) is the cost of borrowing money expressed as a yearly percentage. It includes the interest rate on a loan or credit, as well as any fees or other charges associated with the loan or credit. The APR is intended to provide consumers with a standardized way to compare the cost of different loans or credit products.
The APR is calculated by taking into account the interest rate, any points, fees, and other charges associated with the loan or credit, and expressing the total cost as a yearly percentage. The APR is required to be disclosed by law for most types of consumer loans and credit products, including mortgages, personal loans, and credit cards.
It is important to note that the APR is different from the interest rate, as it includes other fees and charges associated with the loan or credit. As such, the APR is usually higher than the interest rate, and can be a more accurate way to compare the cost of different loans or credit products.
When shopping for a loan or credit product, it is important to compare the APRs of different lenders or credit providers to get a sense of the total cost of the loan or credit. It is also important to carefully review the terms and conditions of any loan or credit product, including any fees or charges, before committing to it.