APR (Annual Percentage Rate)
The yearly cost of borrowing, expressed as a percentage. It includes the interest rate plus most lender fees, so it reflects the true price of a loan better than the rate alone.
By Findley's Finance · Last reviewed: September 2026
Why it matters
APR exists so lenders cannot hide the cost of a loan behind fees. Two loans with the same interest rate can have different APRs if one charges higher origination fees — the higher APR is the more expensive loan. On credit cards the APR is the number that determines how fast a carried balance grows: at 24% APR, a $5,000 balance left alone costs roughly $100 a month in interest before you pay a cent of principal.
Concrete example
A $300,000 mortgage at 6.5% interest with $6,000 in fees might show a 6.62% APR. The 0.12-point gap is the fees spread across the loan.