Annual Percentage Rate The annual percentage rate (APR) is the annual interest rate that lenders charge borrowers for borrowing money, expressed as a percentage of the total amount borrowed. This rate takes into account not only the interest rate, but also any fees or charges associated with the loan, such as origination fees or closing costs. The APR provides borrowers with a more accurate picture of the cost of borrowing than just the interest rate alone, as it reflects the total cost of the loan over the course of a year. The APR is a useful tool for comparing different loan offers from different lenders, as it provides a standardized way of comparing the cost of borrowing. A borrower can use the APR to compare loans with different interest rates, loan terms, and fees, and choose the loan that offers the lowest overall cost. It is important to note, however, that the APR does not take into account factors such as prepayment penalties or the borrower’s creditworthiness, which can affect the actual cost of the loan. What is APR? How is APR different from interest rate? How is APR calculated? Can APR change over time? What is a good APR rate? How does APR affect monthly payments? Annual Percentage Rate for Credit Cards