The letters APR stand for “Annual Percentage Rate” and provide an indication of how expensive a loan is. In addition to the interest rate, the APR includes the percentage equivalent of the file fees (or loan origination fees), insurance fees, and any other fee or cost associated with the transaction (except for penalties), reflecting as such the annual cost of borrowing money. The APR of a loan might be higher than the interest rate communicated. If you are looking to take a loan, and wish to compare the offers of different potential lenders, the APR provides you with the easiest and clearest way to do so; it is the most accurate tool reflecting the cost of the loan on the borrowers. Remember, you usually want as low an APR rate as possible, since the higher the APR on a loan, the more you will have to pay (assuming all other conditions are equal).