The Difference between Interest rate and Annual Percentage rate (APR).
We at Credithelpfinancial are asked quite often why there are two different rates on the bank contracts one called Annual Interest rate and one a little higher that reads Annual Percentage rates?
The APR is a calculated rate that not only includes the interest rate but also takes into account other lender fees required to finance the loan. The idea behind APR is to help consumers understand the tradeoffs between interest rate and the fees paid at closing (such as paying higher fees to lower interest rates or increasing interest rates to cover closing costs).
At Credithelpfinancial we will explain these rates to you before you sign the contract.