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What is the difference between APR and the interest rate of a loan?

April 26, 2017Apr difference Interest rate loan

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What is the difference between APR and the interest rate of a loan?

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The interest rate on a loan is the cost in repaying the amount you borrowed, multiplied by a certain percentage that the bank charges you for the time it takes you to pay it back. The APR includes all the costs the bank charges you plus the interest rate and the amount of the loan. When comparing interest rates from lender to lender, you want to look at the APR.