
Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is a measure of the cost of credit, expressed as a yearly interest rate.
It is the effective interest rate that a borrower must pay on a loan, taking into account the amount borrowed, the length of the loan term, and any fees or points paid to obtain the loan.
For example, if a borrower takes out a loan of $10,000 to be paid back over five years with a 2.5% APR, the borrower will pay back $10,500 total over the life of the loan, or $208.33 per month.