24 Hour Loans glossary of financial terms

Annual percentage rate (APR)

The term annual percentage rate (APR) is used to describe the interest rates and costs that you will be charged to borrow money by any lender. So, if you apply for a mortgage, loan or credit card, you?ll be given an APR to show you how much will be charged over a year. All lenders are legally required to show an APR for a loans product.

You may see many special deals offered for lending products in the short-term but the APR is the percentage that will tell you exactly what your charges will be over 12 months. The APR has to include all costs related to your finance product so this is the most accurate description of how much you will have to pay and industry experts recommend that consumers use it to assess the true costs of their borrowing. The APR offered to individuals by companies will not always be the same ? finance companies tend to offer lower APRs to people with good credit and higher APRs to people with bad credit.