The Annual Percentage Rate (APR) is the effective annual rate of interest for a loan, taking into account fees and other associated costs, disclosed as required by the Truth-in-Lending Act.
The Annual Percentage Rate (APR) represents the yearly cost of borrowing, expressed as a percentage. It includes both the interest rate and any additional fees or costs associated with the loan. APR provides a comprehensive measure to compare different loan products.
Regulation Z, also known as the Truth in Lending Act (TILA), requires creditors to provide full disclosure of the terms of a loan, including the interest rate as an Annual Percentage Rate (APR). This regulation is compulsory for anyone who arranges credit for more than five sales of residential real estate in a year.
