Annual Percentage Rate (APR)
Accounting Dictionary
Annual Percentage Rate (APR)
The annual percentage rate is the interest rate calculated by considering all of the added costs (points, application fee, closing costs, etc.) for a given loan. The calculation spreads these costs over the life of the loan, along with the interest rate, to arrive at a more accurate annualized percentage rate than the stated interest rate alone. The annual percentage rate for a given loan is equal to the stated interest rate if there are no added costs. The APR must be disclosed. See also stated interest rate.
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