APR (Annual Percentage Rate)
APR is the yearly cost of borrowing money, expressed as a percentage that includes both the interest rate and mandatory fees like origination charges. Because it bundles fees in, APR is the number to compare across loan offers — a lower APR means a cheaper loan overall.
For a loan with no fees, APR equals the interest rate. When fees exist, APR is higher than the rate, which is why lenders must disclose it under the Truth in Lending Act. Note that APR does not account for compounding within the year the way APY does, so for credit cards the effective cost can be slightly higher than the stated APR.
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