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APR

August 22, 2026 · Aditya Gupta

Personal Finance

Annual Percentage Rate (APR) is the yearly cost of borrowing money expressed as a percentage of the loan amount, including the base interest rate plus most fees. It's required by the Truth in Lending Act to be disclosed on consumer loans, mortgages, and credit cards in the US, giving borrowers a more honest comparison than the headline interest rate alone. A mortgage advertised at 6.5% interest might carry a 6.85% APR once origination fees and discount points are included. Always compare APR-to-APR when shopping loans. Note: APR for credit cards excludes the compounding effect, which is why APY is the more accurate metric on savings products.

Personal Finance

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