An annual percentage rate (APR) is the total cost of taking out the loan. By law, lenders are required to publish the APR. It is similar to the unit price (per pound/ per quart/ per 100 sheets) vs the retail price that allows borrowers to compare apples to apples.

Sometimes an advertised loan with a very low interest rate could have a high APR due to accompanying fees. It is your job to continue looking for a loan with a better APR.

When shopping for different mortgage loans, it is best to compare the APR of one loan to the APR of the other loan. Don’t get tricked by a low interest rate with a high APR because the loan with the higher APR is usually the more expensive loan in the long run.

Categories: Finance

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