APR, or annual percentage rate, is a measure of the cost of borrowing money. It is expressed as a percentage and takes into account not only the interest rate on a loan, but also any fees and other charges that are associated with the loan.
The APR is designed to help borrowers compare the total cost of different loans and make an informed decision about which loan is the most suitable for their needs. It is important to note that the APR may be different from the interest rate, as it includes additional costs such as application fees, origination fees, and any other charges that are associated with the loan.
To calculate the APR, the lender will take the total cost of the loan, including any fees and charges, and divide it by the amount borrowed. The result is then expressed as a percentage and represents the annual cost of borrowing the money.
