Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What is the difference between an APR and an interest rate?

April 26, 2017Apr difference Interest rate

0

Posted

What is the difference between an APR and an interest rate?

1 Answer

0

Posted

APR or Annual Percentage Rate is the figure which reflects the total cost of a loan, averaged over the entire loan term. The APR must be rounded to two decimal places and stated within an eighth of 1 percent. The interest rate is a periodic rate expressed or a finance charge that is or may be imposed by a creditor on a balance for a day, week, month or other subdivision of a year. The APR is a better indicator of your total costs and it allows you to compare loan products. We are required by the Federal Truth in Lending Act to disclose to you the APR in addition to the stated interest rate.