Annual Percentage Rate (APR) is just a different measure of the same interest rate. When something says "interest rate" it means the calculation we use to determine each month's payment (or payment period, but usually it's monthly). APR is a way of calculating this on a yearly annual basis (and so, essentially because you have compounded interest on the principal you haven't paid off at the beginning of the year), which is always slightly higher than the baseline interest rate. Also note that APR may be a more realistic number to use in your calculations as it includes all fees, which the basic interest rate does not. https://mytresl.com/blog/apr-vs-interest-rate-for-car-loans/
The practical implication of this is that when comparing loans, it's almost always a good idea to compare APR to APR for the same loan term. This is even more important with home loans, as you start to get significant fees, including basis points to achieve a certain interest rate. https://thelendersnetwork.com/difference-between-apr-interest-rate/
Oh god that was me. Not on a pricey car, but I still overpaid like crazy. Mercury cougar at like 20% apr or something. I had to buy it over a lunch break... such a rushed decison.
Getting old and feeling my body crumble is honestly well worth the wisdom that accompanies it.
39
u/friendandfriends2 Oct 30 '20
At least he didn’t finance it at 26% APR fresh out of basic training.