Why is the interest rate on a loan different from the APR?

When loans are advertised, they always have 2 rates- a regular rate, and an "annual percentage rate" which is always higher.





Seems to me that the APR should be lower, or the same as, the offered interest rate. Anyone out there interested in taking a stab at a simple explanation?|||Annual Percentage Rate (APR) is a way to compare the costs of a loan. Although it鈥檚 not perfect, it gives you a nice standard for comparing the percentage costs on different loans. This page covers the basics of APR, and how you can calculate it.








http://banking.about.com/od/loans/a/calc鈥?/a>|||I have seen APR (annual percentage rate) and APY (annual percentage yield). APY shows compounding that is why it is higher but I have never seen loan rates advertised in pairs.





I'm not loan officer but the APR may be higher because it is including closing fees/taxes/miscl costs.





Hope this helps.|||I had the same problem last year. Play it safe %26amp; click on the first and eighth links here; www.loanssource.tk