what is apr

APR stands for Annual Percentage Rate, which is the yearly interest generated by a sum thats charged to borrowers or paid to investors. It is a measure of the cost of borrowing money, expressed as a percentage. The APR includes both the interest rate and any fees the lender tacks on. It is intended to make it easier to compare lenders and loan options. The exact legal definition of "effective APR" or EAR can vary greatly in each jurisdiction, depending on the type of fees included, such as participation fees, loan origination fees, monthly service charges, or late fees. The calculation and disclosure of APR is governed by the Truth in Lending Act in the US. In summary, APR is a measure of the cost of borrowing money, expressed as a percentage, that includes both the interest rate and any fees charged by the lender.