What does APR stand for?

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Multiple Choice

What does APR stand for?

APR stands for Annual Percentage Rate. It represents the yearly cost of borrowing money, shown as a percentage. This rate typically includes the interest you’ll pay plus many lenders’ fees, such as origination or closing costs, so you can compare different loan offers on a like-for-like yearly cost. In practice, a lower APR usually means lower overall borrowing costs, though it's good to check exactly which fees are included, since definitions can vary slightly by product and jurisdiction. For contrast, APY (Annual Percentage Yield) is used for savings or investments and reflects earned interest with compounding, not the cost of credit.

APR stands for Annual Percentage Rate. It represents the yearly cost of borrowing money, shown as a percentage. This rate typically includes the interest you’ll pay plus many lenders’ fees, such as origination or closing costs, so you can compare different loan offers on a like-for-like yearly cost. In practice, a lower APR usually means lower overall borrowing costs, though it's good to check exactly which fees are included, since definitions can vary slightly by product and jurisdiction. For contrast, APY (Annual Percentage Yield) is used for savings or investments and reflects earned interest with compounding, not the cost of credit.

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