Interest rate
The interest rate is the percentage used to calculate interest on the outstanding balance. It does not necessarily show every cost attached to the loan.
Annual percentage rate
APR combines the interest rate with certain finance charges and expresses the result as an annualized percentage. Which fees are included can depend on the product and applicable disclosure rules.
Why it matters: Two loans can advertise the same interest rate but have different APRs because one charges more upfront fees.
How to compare correctly
- Compare the same loan amount.
- Use the same repayment term.
- Check whether the rate is fixed or variable.
- Review total repayment and all disclosed fees.
- Do not choose solely by the lowest monthly payment.
APR has limits
APR is useful, but it does not tell you whether a payment fits your budget or whether you will keep the loan for the full term. Optional charges, late fees, and early payoff can also change what you actually pay.
See how APR changes a payment
Adjust the APR in our calculator and compare the monthly payment and total interest.
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