---
title: "APR (annual percentage rate): definition | Desert Rock Capital"
url: "https://www.desertrockcapital.com/glossary/apr"
description: "Under the Truth in Lending Act (Regulation Z), the annual percentage rate is 'a measure of the cost of credit, expressed as a yearly rate, that relates the."
---

Loan costs

# APR (annual percentage rate)
All lending terms
Definition

Under the Truth in Lending Act (Regulation Z), the annual percentage rate is "a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments made."

The annual percentage rate (APR) states the cost of credit as a yearly percentage and folds in not only the interest rate but also certain required charges, such as some origination fees, so it often gives a fuller picture of cost than the interest rate alone. In the United States, the Truth in Lending Act requires lenders to disclose the APR before you commit, which allows offers to be compared on a consistent basis. APR can be fixed or variable. It is a standardized cost measure rather than the dollar amount of interest; the actual interest paid also depends on the principal, the term, and how the balance is paid down. Reviewing the APR alongside the payment amount, the schedule, and the full written terms shows what a loan costs.

Source: [Truth in Lending Act (Regulation Z), 12 CFR 1026.22(a)(1)](https://www.law.cornell.edu/cfr/text/12/1026.22). This definition is general educational information, not legal or financial advice.
Related

- [Loan FAQs](/faqs)
- [Compare: vs. a payday loan](/compare/payday-loan)
- [Compare: vs. a bank loan](/compare/bank-loan)
Back to the Lending Glossary
More in
Loan costs
Principal
Interest
Fixed interest rate
Origination fee
Application fee
Borrow with clarity

## Terms in writing, before you sign.

Desert Rock Capital is a licensed Utah lender with no credit check and no collateral. Apply online or visit a branch in Salt Lake City, Orem, or St. George, and get a straightforward decision, usually in about 30 minutes.
See if you qualify