Frequently Asked Questions(FAQ)

Can APR be equal to or less than the interest rate?

Interest rates and APRs are often the same on credit cards since many do not charge an annual fee or any other required fees.

Should you use interest rate or APR to compare mortgage offers?

You can compare mortgage rates using interest rates or each loan's APR. However, the APR may be a better measure since it's inclusive of interest charges as well as loan fees.

What is a good APR?

A good APR can vary depending on the financial product you're applying for. However, lower APRs are always better since they mean you're paying lower borrowing costs overall.

Does 0% APR mean no interest?

Financial products with 0% APR do not charge a cent interest during the term where this rate applies. However, you should know that 0% APR offers do not last forever, and that they are followed by high variable rates in most cases.


About the Authors

Holly Johnson

Written by: Holly Johnson

Award-Winning Personal Finance Contributor

I’m a professional writer who is obsessed with money, travel, and budgeting.

More about me

More About Glossary of Common Financial Terms

Show More