What is APR (Annual Percentage Rate)?
APR is the yearly cost of a loan as a percentage that includes not just the interest rate but also certain lender fees and closing costs. Because it bundles in those costs, the APR is usually slightly higher than the quoted rate and gives a fuller picture for comparing offers.
Example: Two lenders quote a 6.5% rate, but one has higher fees; comparing APRs — 6.7% versus 6.9% — reveals which loan is actually cheaper overall.