APR expresses an annualized cost of credit that incorporates interest and certain charges under applicable rules. In US disclosures it can exceed the interest rate when included fees raise borrowing costs. A lower monthly payment alone does not establish a cheaper loan, especially if its term is longer. APR belongs here as a comparison tool, but included costs, assumptions and local equivalents such as Spain’s TAE must be checked rather than treated as identical everywhere.
Source: Annual percentage rate (APR).
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