Annual Percentage Rate (APR), is a measure used to calculate the cost of borrowingThe cost of borrowing refers to the total expenses that a borrower incurs when taking out a loan or using credit. This cost is not just the interest r... on financial products such as mobile loans and bank loans.
It represents the annual rate charged for borrowing or earned through an investment and is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan.
This includes any fees or additional costs associated with the transaction but does not take compounding into account.
When it comes to mobile loans, the APR provides a comprehensive figure that allows borrowers to compare different loan products with varying interest rates and fee structures.
For example, if you borrow a certain amount through a mobile loan app, the APR will include the interest rate, origination fee, as well as any other fees that may be required as part of the loan agreement.
The APR can be higher than the basic interest rate because it encompasses all the costs of the loan.
Therefore, when evaluating mobile loans, it’s important to look at the APR rather than just the interest rate, as it gives a more complete picture of the loan’s cost.
