What Is APR In Banking Terms

 APR stands for Annual Percentage Rate and is a measure of the cost of borrowing money on a yearly basis, expressed as a percentage. It includes the interest rate and any other fees or charges associated with the loan, such as origination fees, closing costs, or prepayment penalties.

When someone takes out a bank loan or applies for credit, the APR is an important factor to consider because it represents the total cost of the loan over the course of a year. A lower APR generally means a lower overall cost of borrowing, while a higher APR means a higher overall cost.

To compare the cost of different loan offers, it's important to look at the APR rather than just the interest rate, as the APR includes all fees and charges associated with the loan. It's also important to note that the APR can vary depending on the type of loan, the lender, and the borrower's creditworthiness.