LENDING GLOSSARY
APR
Annual Percentage Rate
The annualized cost of borrowing, including interest and certain fees.
What does APR mean?
The annualized cost of borrowing, including interest and certain fees. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
APR in context
A loan with interest and eligible fees may show a 9.4% APR even when its stated rate is 9%.
Why it matters in financing
APR can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related lending terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.