Metrics

APR

Also known as: annual percentage rate

status: draft

Annual percentage rate. The annualized cost of borrowing expressed as a percentage, including interest and certain fees. Required disclosure under Truth in Lending Act (TILA) for consumer credit products.

What to watch

APR is standardized for comparison but does not capture all costs. Origination fees, late fees, and prepayment penalties may not be fully reflected. For high-rate consumer lending (payday, installment loans), headline APRs can exceed 100% or even 300%. Regulators and state usury laws often use APR as the trigger for rate caps, so compliance depends on accurate calculation.

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