APR stands for the Annual Percentage Rate of charge. You can use it to compare different credit and loan offers. The APR takes into account not just the interest on the loan but also other charges you have to pay, for example, any arrangement fee. All lenders have to tell you what their APR is before you sign an agreement. It will vary from lender to lender.
Source: Interest Rates Guide @ MoneySavingExpert
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- How to work out the true cost of borrowing @ the Money Advice Service
Excerpt: Interest is usually expressed in terms of APR, which stands for ‘annual percentage rate of charge’ and includes arrangement fees and charges. You can use it to compare different credit and loan deals, for example by using a price comparison website.
- What is an APR? @ MoneyFacts.co.uk
Excerpt: An Annual Percentage Rate is basically how much your borrowing will cost over the period of an average year, over the term of your debt. It takes into account interest charged as well as any additional fees (such as an Arrangement Fee on a mortgage or an Annual Fee on a credit card) you’ll have to pay. It also considers the frequency with which interest is charged on your borrowing, as this has an impact on how much you’ll pay as well.
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