Comparison Guide
APR vs. Interest Rate
Understand the difference between APR (Annual Percentage Rate) and Interest Rate. Calculate the true cost of loans and mortgages.
The Verdict
Interest rate only tells you the cost of borrowing the principal. APR is the more important metric because it represents the true total cost of the loan, including fees and closing costs.
APR Calculator
Open CalculatorInterest Rate Calculator
Open CalculatorWhat it Measures
APR CalculatorTotal cost of borrowing (rate + fees)
Interest Rate CalculatorJust the cost of the principal borrowed
Includes Fees?
APR CalculatorYes (origination fees, closing costs, etc.)
Interest Rate CalculatorNo
Value
APR CalculatorAlways higher than (or equal to) the interest rate
Interest Rate CalculatorAlways lower than the APR
Best Use
APR CalculatorComparing multiple loan offers side-by-side
Interest Rate CalculatorCalculating monthly principal & interest payments