Asked by: Melanie Ware
The interest rate is the cost you will pay each year to borrow the money, expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan. An annual percentage rate (APR) is a broader measure of the cost of borrowing money than the interest rate.
What is the difference between fees and interest?
It’s essentially a fee charged by the lender to the borrower in return for giving them a loan. The interest on a loan is usually shown as a percentage of the loan amount and the rate charged will depend on various factors, including but not limited to: The purpose of the loan.
What is the difference between loan fee and interest rate?
Both the APR and a loan’s interest rate describe the cost of borrowing. The interest rate is the percentage lenders charge on your outstanding loan balance, usually expressed on an annual basis. APR includes not only annual interest charges but other additional fees and costs required to get a loan.
What is the difference between interest and loan?
Interest on credits is usually higher than on a loan. Interest is only paid on the amount used, although there may be a minimum fee payable on the undrawn balance. As the money is returned, more will become available, provided that the limit is not exceeded.