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Whats the difference between Interest Rate and Annual Percentage Rate or APR?

April 26, 2017Annual Percentage Rate Apr Interest rate

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Whats the difference between Interest Rate and Annual Percentage Rate or APR?

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The Annual Percentage Rate or “APR” is the rate given at closing that reflects the actual amount of interest the lender is charging you during the first year of your loan. The APR includes the advertised “interest rate” used to calculate your monthly payments, PLUS points, PLUS all other fees charged by the lender in connection with the loan. The Annual Percentage Rate or APR, then, is the true rate of interest a consumer is charged during the first year of a loan.