Debt & Credit
Beginner
APR (Annual Percentage Rate)
💡 In plain English: The true annual cost of borrowing money, including all fees — more honest than just the interest rate.
Definition
The annual cost of borrowing including interest rate and fees, expressed as a percentage. Higher APR = more expensive debt.
📌 Real-World Example
Credit card at 3.5%/month = APR of 42%. Personal loan at 16% p.a. with 2% processing fee → APR ~18.2%. Always compare APRs, not just stated rates.
🔢 Formula
APR = (Interest + Fees) / Principal / Days × 365 × 100
Try it yourself
Use the EMI Calculator to see this concept with your own numbers.
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The price you pay to borrow money — expressed as a percentage per year.
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.