Everything You Need to Know About APR vs. Interest Rate for Car Loans
When looking to finance a car, you may encounter some confusing terms. APR is a term
often used when discussing vehicle sales and auto financing, but it may not be adequately
explained. Keep reading to learn everything you need to know about APR and how it compares
to interest rates when it comes to car loans.
What is APR?
APR stands for Annual Percentage Rate, which differs from interest rates, although both are
expressed as percentages. APR is the total cost of financing your vehicle per year, including fees
and interest accrued to the day of your first payment. Knowing the APR of the car you are
looking to finance is beneficial because it helps compare loan offers from different lenders. The
higher the APR, the more you’ll pay over the course of the loan.
What is Interest Rate?
Interest rate is the cost per year of borrowing money from a lender. This percentage does
not include fees or interest accrued. Interest rates can be determined by a variety of factors,
including your down payment, credit score, employment history, and more.
APR vs. Interest Rates
APR is usually the higher of the two rates as it includes fees and interest accrued. The APR
includes the interest rate and any additional fees the lender charges. Comparatively, the
interest rate only consists of the amount it costs to borrow money from the lender.
Reach Out to Us!
If you are interested in learning more about APR, interest rates, and your options, contact us here at Taz Loans! We are specialized in loans and auto
financing, helping our customers receive the best payment plans for their wants and