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.
The face interest rate is the percentage interest specified on the loan documents, representing the nominal annual interest rate before accounting for additional fees or compounding periods. This term is often compared with the Annual Percentage Rate (APR) and the Effective Rate.
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.
The Truth-in-Lending Act (TILA) is a federal law designed to promote fairness and clarity in credit and lending practices. It requires lenders to disclose clear and standardized information about the terms and costs of loans to protect consumers.
