What's the difference between interest rate and APR?

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Last Updated: December 10, 2024

 

The interest rate is the cost of borrowing money, expressed as a percentage of the loan amount.


The APR (Annual Percentage Rate) includes the interest rate and any additional fees, giving you the total annual cost of the loan. For example, a loan with a 6% interest rate and a 1% fee will have an APR slightly higher than 6%.

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