# APR Loan: How Do Interest Rate And APR Differ, Factors Affecting The APR

There is quite a big difference between Interest and APR. It is also completely dependent on the type of particular loan.

In small instalment loans like personal mortgages and student loans. The **APR and Interest Rate** could be the same or not. In this case, there are no finance charges. Suppose there are additional costs or finance fees like original fees. The APR is higher than the loan's interest Rate. It means the cost or interest of borrowing is more than the interest rate.

The interest rate and APR differ, and the interest rate increases if the duration of the loan is shorter. It means the entire loan can be paid more quickly.

In the case of Credit Cards, the APR and Interest Rare are the same. Credit Cards never consider APR. Hence, the APR, balance cost, and transaction fees should be considered while comparing them to the annual fees. However, credit cards can only partially avoid the interest rate if the full balance is paid at the end of every month.

What factors affect the process when calculating APR for any loan?

Any loan costs you some extra charge. It is calculated annually. So the **APR** is calculated by determining how much it would cost at the end of every month. It includes the financial charges, which are the additional cost and interest rate. Hence for the specific time. It helps in understanding the cost of the borrowed amount in the form of a loan.

The most important point to remember is the APR value can change. It can alter if the loan amount is removed while calculating. It can be due to the interest rate if the interest rate is variable or adjustable even if the person borrowing the loan pays off the loan before its duration. There is no need or rule to pay the APR.

Hence these factors influence the APR of the loan.

### Conclusion

**APR Calculator **calculates the APR of the loan. It can help you understand if the APR cost is affordable and compare it with loans, as the APR cost of any loan helps determine the real cost of any loan.