What is the difference between the Interest Rate and APR?
The loan’s interest rate is what the lender charges you each year (broken down into monthly payments) for borrowing the money, expressed as a percentage rate. Interest rates vary depending on your loan criteria ex: credit score, loan type, down payment and/or property type.
The annual percentage rate (APR) is a representation of the overall cost of the loan, and includes the interest rate, discount points, loan related fees, and other charges attached to the transaction. The APR on a loan will always be a higher number than the interest rate, since it includes these additional costs.