What is the difference between the interest rate and the APR on loans?
The APR is a measurement of the relative cost of your loan transaction. It doesn’t have a bearing on the actual rate of interest you pay on a particular loan, but your loan rate of interest is part of the calculation. Comparing the APR of different mortgage loans you are considering is an important tool to help you measure the relative cost of each loan. It is not the only factor you should consider before making a decision. You need to take into account other factors such as the interest rate and any fees or charges required by the lender. A lower APR on one loan doesn’t necessarily ensure that it is the best mortgage loan for you.
