Direct answer: APR is a standardized percentage used to express the annualized cost of borrowing. It helps consumers compare credit offers, but it should be considered alongside the term, finance charge, fees, payment schedule, and total repayment.
APR vs. Interest Rate
The interest rate is one component of borrowing cost. APR can incorporate certain fees and provides a broader annualized measure under applicable disclosure rules.
Why Short Terms Can Be Misleading
A small dollar finance charge over a short term can correspond to a high annualized APR. Always review both the dollar cost and the APR.
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Transparency note: Loan availability, rates, APR, fees, repayment schedules and eligibility vary by lender and state. Information on this page is educational and does not replace the participating lender's agreement or disclosures.