QIs The Annual Percentage Rate, Or Apr, The Same As The Interest Rate On My Loan?
ANo. Lenders calculate APR by adding the cost of the finance fees to the amount financed, then determining the interest rate over the term of the loan. A loan with an 8.25 interest rate could have an APR of 8.75 percent after the fees are taken into account. Finance fees include points, loan fees, finder's fees, service charges, and private mortgage insurance (which protects the lender in case the buyer defaults). To accurately compare different loans, you compare their advertised APRs with the estimated fees rolled in.