What is an APR?
(back to top) APR stands for Annual Percentage Rate. This is the cost of your credit, including finance charges, expressed as an annual rate. You may have a separate APR for each type of transaction (purchases, cash, balance transfer, etc.). To review how GE Money calculates finance charges, please refer to your credit card agreement.
An APR or annual percentage rate is a numerical figure used to express the cost of credit. It is the yearly amount a consumer must pay for acquiring a loan or other type of credit. By law, lenders are required to fully disclose the APR to consumers. The law that requires loan-cost disclosure is called the Truth in Lending Act. Originally enacted in 1968, the Truth in Lending Act was instituted as part of the Consumer Protection Act. In 1980, it was reformed and simplified as part of the Depository Institutions Deregulations and Monetary Control Act. The intended function of the APR is to allow consumers to compare loans and determine which loans or other types of credit are the least costly. The APR serves to make it more difficult for lenders to hide fees while advertising low interest rates. Essentially, APRs level the very competitive loan market and help consumers make informed borrowing decisions. While APRs can be used to compare loans and determine the least expensive credit pro
The annual percentage rate (APR) is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan. The APR is designed to measure the “true cost of a loan.” It creates a level playing field for lenders. It prevents lenders from advertising a low rate and hiding fees. The APR does not affect your monthly payments. Your monthly payments are strictly a function of the interest rate and the length of the loan. Because different lenders calculate APRs differently, a loan with a lower APR is not necessarily a better rate. The best way to compare loans is to ask lenders to provide you with a good-faith estimate of their costs on the same type of program (e.g. 30-year fixed) at the same interest rate. You can then delete the fees
