Two measures of borrowing cost
Your interest rate describes the charge for borrowing the loan principal. Annual percentage rate, or APR, includes the interest rate and additional loan charges. APR helps you examine costs beyond the interest rate alone.
Compare similar loan options
Review each loan’s interest rate, APR, fees, and loan structure together. Ask why the figures differ. For an adjustable-rate mortgage, also discuss how future rate changes affect the loan.
- Ask which fees contribute to APR.
- Review any points or lender credits.
- Discuss how long you expect to keep the loan.
- Ask your loan officer to explain the full cost comparison.
Use a personal quote for decisions
National averages describe a market snapshot. They do not establish your eligibility or your personal pricing. Request a quote using your loan details before choosing financing.
General education only. This article does not offer a rate or guarantee loan approval. Loan options depend on your circumstances and lender review.