APR (Annual Percentage Rate)
Also known as: Annual Percentage Rate
APR is the yearly cost of borrowing, expressed as a percentage of the loan amount. It includes interest plus most lender fees, so it's a more complete measure of cost than the interest rate alone.
Full definition
APR (Annual Percentage Rate) is the total yearly cost of a loan, expressed as a percentage of the principal. The federal Truth in Lending Act (TILA, Regulation Z) requires U.S. lenders to disclose APR to consumers. Unlike the simple interest rate, APR includes interest plus certain mandatory fees such as origination fees, making it the apples-to-apples number to use when comparing loan offers. Personal-loan APRs in the U.S. typically range from about 6% for the strongest credit profiles to 35.99% for subprime borrowers, with state caps applying in some jurisdictions.
- Written by
- Get Advance Loan Editorial Team
- Reviewed by
- Compliance Review
- Published
- January 15, 2026
- Last reviewed
- May 22, 2026
- Interest rateThe interest rate is the percentage of the loan balance charged per year as interest, excluding fees. It is a component of, but smaller than, the APR.
- Fixed interest rateA fixed rate stays the same for the entire life of the loan, so the monthly payment never changes. Most U.S. personal loans are fixed-rate.
- Variable interest rateA variable rate can change over the life of the loan, usually tied to an index like the prime rate. Monthly payment can rise or fall.
- Prime rateThe prime rate is the benchmark interest rate U.S. banks publish for their most creditworthy commercial customers. Many consumer rates are quoted as prime + a margin.
- Loan termThe loan term is how long you have to repay the loan, usually expressed in months. Common personal-loan terms are 24, 36, 48, 60, and 72 months.
- PrincipalPrincipal is the original loan amount you borrowed, before interest. Each monthly payment goes partly to principal and partly to interest.
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