Financial literacy guide

APR vs interest rate

Interest rate and annual percentage rate are related but not always identical measures, and legal definitions vary by jurisdiction.

APRInterest

Editorial review: August 11, 2026 · Lauren M. Whitfield

Interest rate

The rate generally describes interest charged on the principal under the product terms.

APR

APR may incorporate certain fees or standardized assumptions so borrowers can compare costs, but exactly what it includes depends on applicable law/product.

Do not compare mismatched figures

A monthly rate, annual rate and APR are not interchangeable.

Use official disclosures

For a real loan decision, rely on the lender's required disclosure and the definitions used in your country.

Educational information only. Use current product terms and the rules that apply in your country. For decisions with significant financial consequences, consider an appropriately qualified professional.