Lending regulation
Annual percentage rate (APR)
The total yearly cost of credit expressed as a percentage
It folds the interest rate together with points and most lender fees, which is why it is usually higher than the note rate. Comparing APRs is comparing total cost; comparing note rates is not.
How the exam asks about it
The gap between the note rate and the APR is where the fees are, and items are built on exactly that observation.
Related terms
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