The rate charged on the loan principal alone, before fees are factored in.
The interest rate sets your monthly payment; APR (rate plus certain fees, spread over the term) is meant for comparing total loan cost across lenders. A lower rate with high fees can have a higher APR.
Example: A 6.25% rate loan with $6,000 in fees might carry a 6.45% APR.
FAQ
What is Interest Rate in simple terms?
The interest rate sets your monthly payment; APR (rate plus certain fees, spread over the term) is meant for comparing total loan cost across lenders. A lower rate with high fees can have a higher APR.