Annual Percentage Rate (APR) Calculator
Understanding APR
What is APR?
Annual Percentage Rate (APR) represents the total cost of borrowing, including interest and fees, expressed as a yearly rate. It provides a more comprehensive view of loan costs than the interest rate alone.
Why APR Matters
- Helps compare different loan offers
- Reveals hidden costs and fees
- Required by law for transparency
- Shows true cost of borrowing
APR vs. Interest Rate
- Interest Rate: Basic cost of borrowing
- APR: Total cost including fees
- Difference: APR is typically higher
APR helps you make informed borrowing decisions by showing the full cost of the loan.
Borrowing Tips
- Compare multiple loan offers
- Read all fee disclosures
- Consider total loan cost
- Check prepayment penalties