Interest rate
The interest rate is the rate charged on the borrowed principal and is a major input in calculating loan interest and payments.
APR
Annual percentage rate, or APR, is designed to provide a broader measure of borrowing cost by incorporating the interest rate and certain applicable finance charges under the rules governing the product.
Why they can differ
Fees and other included costs can cause APR to be higher than the stated interest rate. That makes APR useful when comparing similarly structured offers, but it should still be considered alongside loan term, payment structure and total costs.
Compare more than one number
Review the rate, APR, payment, fees, term, amount financed and total expected cost. A lower monthly payment can sometimes result from a longer repayment period rather than a cheaper loan.
Explore scenarios with the Loan Calculator or Mortgage Calculator.
Definitions and disclosure rules vary by jurisdiction and financial product. This guide is general education, not lending advice.