Interest Rate vs APR — What's the Difference?
Clears up the confusion between the note rate (what you pay on your balance) and APR (the all-in annual cost including fees) — and explains exactly when APR helps you compare lenders and when it misleads.
What you'll learn
- Why your monthly payment uses the interest rate, not APR
- Which fees are included in APR and which are excluded (appraisal, title, recording)
- Why APR understates true cost if you sell or refi in under 7 years
- How to use APR effectively: compare loans with the same term from different lenders