 TITLE: Personal Loan Interest Rates and APRs: What’s the Difference? CONTENT: What Is the APR on a Personal Loan?\n-----------------------------------\nThe annual percentage rate (APR) on a personal loan combines the interest rate with any fees associated with the loan. If there are no fees, the APR is the same as the interest rate, but lenders almost always add upfront charges known as origination fees to the cost of a personal loan.\nOrigination fees can range from 2% to 5%, and fees of 3% are typical. These fees do not affect the monthly payment or interest charges on the loan, but they are part of its total cost. APR changes to reflect them.\nIn our example of a $10,000 five-year loan at 9% interest, adding a 3% origination fee leaves the interest rate and monthly payment amount untouched, but increases the APR from 9% to 10.31%.\nDiffering interest rates, loan lifespans and fees make it tricky to do apples-to-apples comparisons between personal loans, so the APR is a helpful yardstick. A loan with a higher APR will cost more over the lifetime of the loan than one with a lower APR—even if monthly payments don't change. END