Debt

APR

Also known as: annual percentage rate.

APR (annual percentage rate) is the effective annual cost or yield of a financial product, including interest, fees and charges, and it's the figure that lets you compare offers.

On loans it folds in origination fees and any compulsory linked products; on deposits it reflects how often interest is credited.

Comparing APR against APR is the only reliable way to know which offer is actually cheaper.

Related terms

Amortizing loan — An amortizing loan (level-payment schedule) is a repayment method where the instalment stays constant while, within it, the interest portion shrinks and the principal portion grows over time.
Extra mortgage payment — An extra mortgage payment is money applied to a loan ahead of schedule to reduce the outstanding principal early, choosing between shortening the term or lowering the instalment.

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Educational content. netclariq does not provide financial, investment, tax or legal advice.