Annual Percentage Rate (APR)

An annual percentage rate is an annual rate that is charged on the loan amount that a person borrows or the rate charged on the money that is earned through an investment. It is different from the interest rate on a loan, in the sense that it also takes into account the fees that you may have to pay while taking out the loan.

Points to remember

  • Annual Percentage Rate gives the borrower an idea of the amount you will pay if you take a loan.
  • While an interest rate and APR are typically the same, APR also takes into account any charges you may have to pay as fees.
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