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Key Takeaways. The interest rate is the cost of borrowing principal, and this rate may be stated at the time of loan closing. The annual percentage rate (APR) is almost always higher than the...
The main difference between a loan’s interest rate and APR is that interest rate represents the cost you’ll pay each year to borrow money, while APR is a more extensive measure of the cost to borrow money and it takes additional fees into account.
APR is the yearly cost of your mortgage, and interest is recalculated each month based on the remaining principal balance. APR is often referred to as the actual cost of your mortgage, making it the best way to compare your borrowing costs when choosing a lender.
The interest rate on a mortgage indicates how much interest you’ll pay for the amount you borrow. The annual percentage rate (APR) is the interest rate plus additional fees and any points.
APR, or annual percentage rate, is a calculation that includes both a loan’s interest rate and a loan’s finance charges, expressed as an annual cost over the life of the loan. In other words,...
A loan’s interest rate is the cost you pay to the lender for borrowing money. The Annual Percentage Rate (APR) is a measure of the interest rate plus the additional fees charged with the loan. Both are expressed as a percentage.
An interest rate tells you the percentage of a loan that you’ll pay as a fee for borrowing that money, while an APR (annual percentage rate) measures all the costs of a loan, including interest and origination fees. In other words, interest rate measures just one factor while APR measures several.