Definition:
Annual Percentage Rate (APR)
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For credit cards, annual percentage rate (APR) refers to the periodic rate times the number of periods in a year. For example, a 1% monthly rate has an APR of 12%. In the context of consumer lending, the APR takes into account more than the interest rate applied to the principal per period.Under the Truth in Lending Act, APR has a specific definition and includes all the costs paid by a non-exempt consumer borrower that are considered a "finance charge," including fees paid to third parties by the lender if not properly disclosed and excluded from the finance charge (such as credit insurance).
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