- Glosary
annual percentage rate
definition of annual percentage rate
annual percentage rate - Annual percentage rate (APR) is a way that helps you compare the cost of a loan. Though this way is not perfect, it can give you an idea about the cost of loan as a whole. With this rate you can compare the percentage rates of different loans. This percentage is one way of choosing the best loan.Loans come with a number of pros and cons and can be quite confusing. It is not possible for common people to understand all the loopholes in a loan document. The lenders can give a number of facts and figures while lending money but at the end of the day the borrower may end up incurring huge expenses for loans. To protect the borrowersâ interest the government of the United States has come up with the Truth in Lending Act. According to this act the lender has to reveal its APR to potential borrower.
With the Annual percentage rate you can evaluate the cost of the loan through a percentage. In the loan document the APR has to be mentioned. You should always look for it before you sign any loan document. If all other things remain constant you should go for the deal that comes with the lowest APR. Though this way of comparing loans is not always accurate, but, in most cases it helps the borrowers to find the best deal. So, while looking for loans you should always try to know the APR or annual percentage rate of the loan you want to take.
near annual percentage rate in Autogalaxy Glosary
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