Annual percentage rate (APR) - Financial definition
Financial acronyms
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Concise definition of the term annual percentage rate
The annual percentage rate is a percentage representing the actual yearly cost of funds over the term of a loan.
Comprehensive definition of the term annual percentage rate
In many jurisdictions, lenders are required to disclose the effective cost of borrowing through some standardised measure in order to protection consumers.
In addition to interest, the APR also takes into consideration fees and other cost, allowing the borrower to compare loan offers with distinct interest and cost structures.