APR or Annual Percentage Rate is a very common term in the banking world.
This term might confuse first-time loan borrowers.
APR is the interest applied to the total amount of loan borrowed by an individual in a year.
There are three ways of computing an effective annual percentage rate:
In other words, APR is the method to compute the annual cost of the credit that you have taken from a particular bank.
It consists of
The actual interest rate
The processing fee
And all other fees charged by a bank on the loan.