APR (Annual Percentage Rate)
The yearly cost of borrowing money, expressed as a percentage and including most fees — not just the interest rate.
APR is the annualised cost of a loan, including the interest rate plus most upfront fees expressed as part of the rate. It exists because comparing loans by interest rate alone is misleading — a "low rate" loan with steep origination fees can cost more than a higher-rate loan with no fees.
On credit cards, APR is essentially the interest rate (there's no origination fee), but it's quoted as an annual number even though it's typically applied daily on outstanding balances. A 24% credit card APR translates to about 0.066% interest per day on whatever you carry — compounding fast on revolving balances.
On mortgages and car loans, APR matters more because the upfront costs are large. A 6% interest rate with 2% in fees often shows up as ~6.3% APR; comparing the APR of two loans gives you the real "all in" cost.
APR is not the same as APY. APR doesn't compound; APY does. For borrowing, you usually see APR. For savings and investments, you usually see APY — because compounding works in your favour there.
See also
- APY (Annual Percentage Yield) — The yearly return on a savings or investment account, including the effect of compounding interest.
- Revolving credit — A line of credit (most commonly a credit card) you can borrow against repeatedly up to a limit, paying only a minimum each month.
- Refinancing — Replacing an existing loan with a new one — usually to lower the interest rate, change the term, or change the monthly payment.
- Credit score — A three-digit number (usually 300–850) lenders use to estimate how likely you are to repay borrowed money on time.
Ask Cashowa about apr (annual percentage rate)
Apply this concept to your actual numbers — with verifiable math.