What is APR?

Q: What is APR?

A: APR, or Annual Percentage Rate, is the effective rate that takes the lender bank's charges into consideration and express the total of all bank charges in the form of an interest rate. Because there are always other finance charges in addition to the note rate (the interest rate base on which payments are calculated), the APR is almost always higher than the note rate. The APR is one of the items required by the Truth-in-Lending to disclose to every potential borrower.