Glossary
What is APR (Annual Percentage Rate)?
APR is the yearly cost of financing expressed as a percentage, including interest and certain fees. Because it accounts for both cost and timing, APR is generally more useful than an interest rate alone for comparing loans with different structures and terms. Short-term products can carry high APRs even when the dollar cost seems modest. Several states require commercial financing providers to disclose an estimated APR for certain products.
Example
Two loans both quote 10% interest, but one charges a large origination fee, giving it a higher APR.
Related terms
Questions about an offer? Your advisor will explain every term.