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The Annual Percentage Rate (APR) is the yearly cost of borrowing money, including interest and other fees, expressed as a single percentage.
In Depth
APR represents the true annual cost of a loan or credit, as it factors in not just the interest rate but also any additional fees or charges associated with the borrowing. This allows consumers to compare the total cost of different loan products more accurately. A higher APR means you will pay more for the money you borrow over a year. It's a key figure to consider when taking out a loan or using a credit card.
Example
If a credit card has a 19.99% APR, it means the annual cost of borrowing on that card, including interest and any relevant fees, is nearly 20% of the amount borrowed.