The yearly cost of borrowing expressed as a percentage, including interest and fees.
Annual Percentage Rate (APR) represents the total yearly cost of a loan or credit, expressed as a percentage of the loan amount. Unlike simple interest, APR includes not just the interest rate but also other costs and fees involved in procuring the loan—such as origination fees, closing costs, and points. APR gives borrowers a more complete picture of what they'll actually pay. Lenders are required by law to disclose the APR prominently in loan documents. When comparing loans, APR is more useful than the stated interest rate alone for determining the true cost of borrowing.