ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The APR of a loan is the annual cost of the loan expressed as a percentage. It includes the interest rate and other miscellaneous costs of availing the loan. This gives you the true cost of borrowing per year, and is especially important since lenders may lure you with a low AIR but levy hefty additional charges.

Detailed explanation-2: -The APR is the cost to borrow money as a yearly percentage. It’s a more complete measure of a loan’s cost than the interest rate alone. It includes the interest rate plus discount points and other fees.

Detailed explanation-3: -Annual percentage rate (APR) refers to the yearly interest generated by a sum that’s charged to borrowers or paid to investors. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment.

Detailed explanation-4: -What’s the difference? APR is the annual cost of a loan to a borrower-including fees. Like an interest rate, the APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees such as mortgage insurance, most closing costs, discount points and loan origination fees.

Detailed explanation-5: -The Annual Percentage Rate (APR) is the cost you pay each year to borrow money, including fees, expressed as a percentage. The APR is a broader measure of the cost to you of borrowing money since it reflects not only the interest rate but also the fees that you have to pay to get the loan.