What is APR?
APR (annual percentage rate): APR, or annual percentage rate, is the yearly cost of borrowing expressed as a rate. It includes the interest rate plus certain fees, such as an origination fee.
Because APR folds required fees into one number, it is usually a better way to compare loan offers than the interest rate alone. Two loans with the same interest rate can have different APRs if one charges a higher fee.
Lenders are required to show you the APR before you sign a loan agreement. On credit cards, APR is the rate charged on balances you carry from month to month.
When you compare offers
Compare APRs on offers for the same amount and term. A lower APR over a much longer term can still cost more in total interest, so look at the total you would repay too.
Related guides
- Comparing Offers: APR, Fees and Term
A plain-language guide to the three numbers that matter most when comparing loan or credit offers — APR, fees and term length.
- Loan Origination Fees, Explained
What loan origination fees are, how they factor into APR, and a simple illustrative example that can help you compare the true loan cost.
This glossary is for general educational purposes and isn't financial, legal or insurance advice. Lendara is not a lender and does not make credit decisions. Lendara is a free online marketplace that connects you with participating lenders and providers, who set their own eligibility rules, rates, fees and terms. Lendara may receive compensation from partners, which may affect which offers appear and their order.