What Is APR (Annual Percentage Rate)? Meaning & Example
Definition
APR is the yearly cost of borrowing, including interest and certain fees, shown as a percentage. It helps compare loans and credit cards.
Related terms
APY is the yearly return on savings including the effect of compounding. It is useful for comparing savings accounts and CDs.
Interest RateAn interest rate is the cost of borrowing money or the reward for saving it, shown as a yearly percentage. Central bank rate decisions influence rates throughout the economy.
Credit ScoreA credit score is a number that summarizes how reliably you have handled borrowing. Higher scores generally lead to easier approvals and lower interest rates.
What is APR (Annual Percentage Rate)?
APR is the yearly cost of borrowing, including interest and certain fees, shown as a percentage. It helps compare loans and credit cards.
Can you give an example of APR (Annual Percentage Rate)?
A credit card with a 24% APR charges far more interest on a carried balance than one with 15%.