APR

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Is Interest Rate and APR the Same Thing?

If you’re in the market for a mortgage, car loan or considering a different credit card, you pay attention to the low rates advertised. Interestingly though, it’s never mentioned what kind of rate the ad is referring to: the basic interest rate or the annual percentage rate (APR). Only one rate tells the full story of how much borrowing that money will cost you. It’s the APR. Here’s the difference: Interest rates reflect the cost you pay each year to borrow $25,000 for a car or $100,000 for a home. It’s a percentage of that principal and it’s determined by…

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