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.